Practising cs as a director/shareholder

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Sneha (Querist)
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21 November 2012 I am a Practising Company Secretary. I am about to incorporate a pvt ltd company which has main objects not related to my profession -

a) Can I be a non-executive Director in that Company?
b) Can I subscribe to its MOA AOA?
c) How much equity can I hold in my name?
d) How much equity can I hold in my father/mother/sister's name?
e) Is there anything else I should do or know?

Ajay Mishra

Ajay Mishra (Expert)
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21 November 2012 Hi

The Council of the Institute at its 156th Meeting held on March 19-20-2005, in exercise of its powers under regulation 168 of the Company Secretaries Regulations, 1982 has accorded general permission to its members in practice to become non-executive director/promoter/promoter-director/subscriber to the Memorandum and Articles of Association of a company the objects of which include areas, which fall within the scope of the profession of Company Secretaries irrespective of whether or not the practising member holds substantial interest in that company.
The Council has further allowed members in practice to become non-executive director/promoter/ promoter director/subscriber to the Memorandum and Articles of Association of a company which is engaged in any other business or occupation provided that the practising member does not hold substantial interest in the company.
The Council in its resolution adopted at the said meeting defined the term non-executive director as to mean an ordinary director who is required to attend the meetings of the Board or its committees only, not paid any remuneration except the sitting fees for attending the Board/Committee meetings and any remuneration to which he is entitled as ordinary director, and devoting his time for the company only to attend meetings of the Board or Committees thereof and not for any other purpose.

Regards

Sneha

Sneha (Querist)
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21 November 2012 how much is substantial interest and how about shareholding of my relatives in the same company?

Ajay Mishra

Ajay Mishra (Expert)
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21 November 2012

As per my understanding, Substantial interest means holding shares directly or indirectly with director or their relatives more than 2% of paid up shares capital.

Sneha

Sneha (Querist)
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21 November 2012 https://www.icsi.edu/CSPractice/PCSnottoEngage.aspx

the guidelines say substantial interest is not less than 25%

Ajay Mishra

Ajay Mishra (Expert)
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21 November 2012 Ok...

Thanks for sharing.

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