Section 149(3) of the Companies Act, 2013 is a legal provision in India that mandates all companies to have at least one director who has stayed in India for a total of not less than 182 days in the previous calendar year. This requirement is applicable to all types of companies, whether they are public or private limited, and whether they are listed or unlisted.
The primary objective of this provision is to ensure that each company has a director who is well-versed with the legal, regulatory, and economic environment of India. Such a director can provide valuable insights and guidance to the company's management team and board of directors on matters related to Indian laws and regulations, as well as on how to conduct business effectively in India.
Additionally, having a director who has stayed in India for a significant period can also help companies maintain compliance with local laws and regulations, which can be complex and subject to frequent changes. This, in turn, can help companies avoid legal and financial penalties, as well as reputational damage that can arise from non-compliance.
Overall, the requirement for appointment of an Indian director is an important provision that helps ensure that companies operating in India have access to the local knowledge and expertise needed to succeed in the Indian market.
By Siddharth Dalmia
the Startup Sherpa