No. of directorship
This query is : Resolved
20 August 2012
what no of companies director can hold directorship as whole time employee of company.
20 August 2012
Since whole-time director means a director of a company who is in whole-time employment with the company, therefore an individual cannot be appointed as a whole-time director of more than one company.
It has been held by the Bombay High Court that the expression "whole-time director'' must refer to a director who spends all his time in the management of the company in the same sense as a managing director does. [Ramaben A Thanawalav Jyoti Ltd (1957) 27 Comp Cas 105 (Bom)] though he may acceptoffice of non-whole-time director in other companies subject to the limits imposed by section 275 read withsections 277 and 278.
It has been held by the Bombay High Court that the expression "whole-time director'' must refer to a director who spends all his time in the management of the company in the same sense as a managing director does. [Ramaben A Thanawalav Jyoti Ltd (1957) 27 Comp Cas 105 (Bom)] though he may acceptoffice of non-whole-time director in other companies subject to the limits imposed by section 275 read withsections 277 and 278.
20 August 2012
THEASE PROVISIONS APPLICABLE FOR PVT LTD COMPANY ALSO? AFTER CBEC NOTIFICATION NO 45/2012-ST dated 7-8-2012 IF 2 PVT LTD COMPANY ARE MANAGED BY SAME MANAGMENT AND GETTING REMUNARATION FROM BOTH COMPANY, IN THAT CASE WE HAVE TO PAY SERVICE TAX OR NOT?
04 August 2024
### Number of Directorships a Whole-Time Director Can Hold
**Provisions for Directors:**
1. **Under the Companies Act, 2013:**
- A director of a company (whether whole-time or otherwise) can hold directorships in a maximum of 20 companies at any point in time, out of which not more than 10 can be public companies.
- This limit includes directorships held in all types of companies, including private limited companies.
2. **Specific Provisions for Whole-Time Directors:**
- Whole-time directors, who are employed full-time by the company, are subject to the same limits on directorships as other directors. The Companies Act, 2013 does not provide any separate or additional limits for whole-time directors.
**Relevant Sections:**
- Section 165 of the Companies Act, 2013: Specifies the maximum number of directorships a director can hold.
- Section 149(3): Relates to the appointment of directors in various types of companies.
### Service Tax on Remuneration from Multiple Private Limited Companies
**CBEC Notification No. 45/2012-ST dated 7-8-2012:**
This notification pertains to the applicability of service tax on services provided by an individual or a body corporate. Here are the key points:
1. **Applicability of Service Tax:**
- **Scope:** The notification specifies that service tax applies to certain services provided by a body corporate or an individual. This includes services where the body corporate or individual is engaged in providing services to another person for consideration.
- **Remuneration for Services:** If two private limited companies are managed by the same management and are paying remuneration to the same individual, the payment of service tax depends on whether the remuneration constitutes consideration for a service provided.
2. **Service Tax on Remuneration:**
- If the remuneration received by an individual from both companies is for managing the companies and falls under taxable services, then it may be subject to service tax.
- However, if the remuneration is simply a salary or wage paid for employment services, and if it falls under the exempt category (such as salaries paid to employees), service tax may not apply.
3. **Conditions and Exemptions:**
- Service tax typically applies to services rendered for a fee or remuneration. If the remuneration is strictly in the nature of salary and does not involve additional consideration for services rendered beyond regular employment, it may not attract service tax.
4. **Consultation and Compliance:**
- To ensure compliance, it's advisable to consult with a tax professional or legal advisor who can review the specific arrangements and provide guidance on whether service tax is applicable in the given scenario.
**Summary:**
- A whole-time director can hold directorships in up to 20 companies, including private limited companies, with no more than 10 being public companies.
- Regarding service tax, remuneration paid by multiple private limited companies to the same individual might be subject to service tax if it involves consideration for taxable services. For employment-related remuneration, service tax may not apply. It is best to consult a tax professional to assess the specifics of the situation.
**Provisions for Directors:**
1. **Under the Companies Act, 2013:**
- A director of a company (whether whole-time or otherwise) can hold directorships in a maximum of 20 companies at any point in time, out of which not more than 10 can be public companies.
- This limit includes directorships held in all types of companies, including private limited companies.
2. **Specific Provisions for Whole-Time Directors:**
- Whole-time directors, who are employed full-time by the company, are subject to the same limits on directorships as other directors. The Companies Act, 2013 does not provide any separate or additional limits for whole-time directors.
**Relevant Sections:**
- Section 165 of the Companies Act, 2013: Specifies the maximum number of directorships a director can hold.
- Section 149(3): Relates to the appointment of directors in various types of companies.
### Service Tax on Remuneration from Multiple Private Limited Companies
**CBEC Notification No. 45/2012-ST dated 7-8-2012:**
This notification pertains to the applicability of service tax on services provided by an individual or a body corporate. Here are the key points:
1. **Applicability of Service Tax:**
- **Scope:** The notification specifies that service tax applies to certain services provided by a body corporate or an individual. This includes services where the body corporate or individual is engaged in providing services to another person for consideration.
- **Remuneration for Services:** If two private limited companies are managed by the same management and are paying remuneration to the same individual, the payment of service tax depends on whether the remuneration constitutes consideration for a service provided.
2. **Service Tax on Remuneration:**
- If the remuneration received by an individual from both companies is for managing the companies and falls under taxable services, then it may be subject to service tax.
- However, if the remuneration is simply a salary or wage paid for employment services, and if it falls under the exempt category (such as salaries paid to employees), service tax may not apply.
3. **Conditions and Exemptions:**
- Service tax typically applies to services rendered for a fee or remuneration. If the remuneration is strictly in the nature of salary and does not involve additional consideration for services rendered beyond regular employment, it may not attract service tax.
4. **Consultation and Compliance:**
- To ensure compliance, it's advisable to consult with a tax professional or legal advisor who can review the specific arrangements and provide guidance on whether service tax is applicable in the given scenario.
**Summary:**
- A whole-time director can hold directorships in up to 20 companies, including private limited companies, with no more than 10 being public companies.
- Regarding service tax, remuneration paid by multiple private limited companies to the same individual might be subject to service tax if it involves consideration for taxable services. For employment-related remuneration, service tax may not apply. It is best to consult a tax professional to assess the specifics of the situation.
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