Thursday, December 8, 2011

Can a director remain outside state forever - Indian Companies Act, 1956

Question : Can a director remain outside state forever


Yes there is no restriction in the location of a Director.  Section 252 to Section 284 of the Companies Act, 1956 deals with appointment, qualification, disqualification, restriction etc of Directors, which does not specify any conditionality on location of directors

As the director is overseas care should be taken under section 283(1)(g) which states that a director shall vacate office if

"he absents himself from three consecutive meetings of the Board of directors, or from all meetings of the Board for a continuous period of three months, whichever is longer, without obtaining leave of absence from the board"

So it should be ensured that this directors attends the board meetings or takes a proper leave of absence.


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