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Maximum No. of Companies in which a person can be MD

Kumar (Article) (922 Points)

18 September 2010

What is the maximum no of companies in which a person can become

a. Managing Director,

b. Director

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3 Replies

ViveK (.) (312 Points)
Replied 18 September 2010

Managing director

For private company there is no restriction

For public company not more than 2 without the approval of central government

Director

15 companies excluding :-

private company

section 25 company

foreign company

MD is also a director so if a person is MD in 2 public companies then he can be a director in 13(total 15) other public companies

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Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 18 September 2010

Originally posted by : Kumar

What is the maximum no of companies in which a person can become

a. Managing Director-----Section 316---To become MD of second company--unanimous approval of board is required. To become MD of more than 2 companies prior approval of central gov. is required.

b. Director------Section 275 Maximum 15 companies (Also refer section 278)

ViveK (.) (312 Points)
Replied 18 September 2010

yes right, but with due respect, this section doesn't restrict managing directorship in private companies

For unanimous approval* of the board :-if he is seeking second appointment in a public company then an unanimous approval is needed even if the first company(in which he is appointed already) is private or public

*(unanimous approval means all the director present shall vote in favor of the decision and if even one member doesn't vote resolution can't be passed)

For govt approval :-for 2 or more public companies qovt approval is needed

and there is no restriction placed by section 316(the section is silent in this case) in case of private company if all the companies are private