In how many companies can a person be a md ?

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sandeep k. gianchandani (Querist)
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04 March 2013 SEC 316(2) PROVIDES THAT A PUBLIC CO. (INCLUDING DEEMED PUBLIC ) MAY APPOINT APERSON AS ITS MD, IF HE IS MD OF ONE, AND NOT MORE THAN ONE, OTHER COMPANY (INCLUDING PVT COMPANIES.

THE ABOVE PROVISION IMPLIES THAT :-

1. IF I AM MD OF ANY NO. OF private COMPANIES, I CANNOT BE MD OF PUBLIC CO., BECAUSE I AM MD OF MORE THAN ONE OTHER COMPANY.

2. AND IF I AM MD OF A PUBLIC CO., I CAN BE MD OF ANOTHER PUBLIC CO. BUT AFTER THAT I CAN BE MD OF ANY NO. OF PRIVATE COMANIES.

THEN IT IMLIES "FIRST" I HAVE TO BE MD OF PUBLIC CO., IF I WANT TO BE SO AND THEN I CAN BE MD OF ANY NO. OF RIVATE COMPANIES??

please let me know whether i am right....

Ajay Mishra

Ajay Mishra (Expert)
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04 March 2013 Hi

The provision of section 269 relating to appointment of MD is not applicable to private limited company. The appointment of MD in private limited company will not be counted for appointment of MD in Public company.

A person can be MD of a number of private companies without the approval of central government.

sandeep k. gianchandani

sandeep k. gianchandani (Querist)
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04 March 2013 dear sir, with respect to your answer that sec 269 do not apply to private company, I would submit that my query pertains to number of managing directorships with regard to sec 316(2) as has been quoted in original question.

Please reconsider your answer

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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29 July 2024 Under the Companies Act, 2013 in India, the provisions related to the appointment of a Managing Director (MD) are outlined in Section 316. Here’s a detailed explanation of how it affects the number of companies in which a person can hold the position of MD:

### **Provisions of Section 316(2)**

**Section 316(2) of the Companies Act, 2013** states:
> "A public company (including a deemed public company) may appoint a person as its Managing Director if such person is not the Managing Director of more than one other company (including private companies)."

### **Implications and Interpretations**

1. **Managing Director of Public Companies:**
- **If you are the MD of a public company**, you can also be MD of one other public company, or in addition, you can be MD of any number of private companies. The critical point here is that you can be MD of only one other public company at most.

2. **Managing Director of Private Companies:**
- **If you are MD of only private companies**, you can be MD of any number of private companies without any restriction. The restriction applies only when you are an MD of public companies.

3. **Combination of Public and Private Companies:**
- If you are MD of **one public company**, you can also be MD of **one other company** (whether it is public or private). Additionally, you can be MD of any number of private companies. Thus, you are correct in noting that being MD of a public company imposes limits on how many other public companies you can be MD of, but allows for MD positions in private companies.

4. **Private Company MD Restrictions:**
- **If you are MD of only private companies**, there are no specific statutory limits on the number of private companies in which you can hold the position of MD.

### **Clarification**

To summarize:

- **Being MD of a Public Company:**
- You can be MD of one other public company and also MD of any number of private companies.

- **Being MD of Private Companies Only:**
- You can be MD of any number of private companies without any specific restrictions.

So, if your aim is to be MD of multiple companies and include public companies, you must first be MD of a public company and then you can also hold the position in another public company (subject to the limit) and any number of private companies.

### **Additional Considerations**

- **Compliance with Other Provisions:**
- Ensure compliance with other relevant provisions of the Companies Act and corporate governance norms.
- If you hold multiple MD positions, proper disclosure and approval from the board/shareholders are required.

- **Professional Advice:**
- Consulting with a company secretary or legal professional can help navigate these rules effectively and ensure compliance.

This interpretation aligns with the legal provisions and aims to balance the involvement of MDs across different companies, especially public companies, to avoid conflicts of interest and ensure effective management.