Shivani Mittal (Practice) 29 June 2014
Ministry of Corporate Affairs vide its General Circular No. 25/2014 dated 26th June, 2014 has issued Clarification on Applicability of Requirement for Resident Director.
As per Section 149 of the Companies Act, 2013, it is required for every company to have at least one director who has stayed in India for a total period of not less than 182 days in the previous calendar year.
Through this circular, it is hereby clarified that, 'Residency Requirement' would be reckoned from the date of commencement of section 149 of the Companies Act, 2013 i.e. 1st April, 2014.
For complying with the above provisions, the first previous calendar year would therefore, be Calendar year 2014 and the period to be taken into account will be the remaining period of calendar year 2014 (i.e. 1st April to 31st December). Therefore, on a proportionate basis, the number of days for which the director(s) would need to be resident in India, during Calendar year 2014, shall exceed 136 days.
Also, it is to be noted that the new companies incorporated between 1st April, 2014 to 30th September, 2O14 should have a resident director either at the incorporation stage itself or within six months of their incorporation and the Companies to be incorporated after 30th September, 2014, need to have the resident director from the date of incorporation itself.