Number of directorships

While reading  Sub Section (1) and Sub Section (2) of Section 165 my understanding is that:-

As per Sub Section (1) a director shall not hold office as a director including any alternate directorship in more than twenty companies

Provided that the maximum number of public companies in which a person can be appointed as a director shall not exceed ten.

However as per Sub Section (2) the Members can reduce the number of directorships of any director by passing special resolution. 

Let me provide an example.

Mr. A is the director of ABC Ltd. He is holding total of 18 directorships. 10 in public companies and 8 in private companies. As per Sub Section (2) of Section 165 of the Companies Act, 2013 the members of ABC Ltd  by passing special resolution can reduce the limit of total directorships of Mr. A to any number less than 18. This is within the overall limit presribed by Sub Section (1).

Others Views are also Welcome.

Regards,

Arjun Rajagopal

IF THE COMPANY WANS THE DIRECTOR TO HOLD LESS THAN 20 DIRECTORSHIP THEY CAN PASS SR TO THIS REGARD

Dear Arjun,

Thanks for the reply,

But if members of the company can reduce the directorship of a director, then no any director will join this company.

Hi Pankaj,

The Act says so. I think this section will be rarely utilised by only certain shareholders. Since the Companies Act, 2013 is not known to many. So don't worry.

Regards,

Arjun Rajagopal