Hiring a Company Director in India: Qualifications and Responsibilities
In a family, each member has their own responsibilities. In other words, it is the head who takes the decision for the betterment of the family. Similarly, in a company, the director acts as the head and takes decisions for the growth. It is the duty of the company director to create and implement strategies. In this article, you will learn how you can become a company director and what the requirements are.
What to Know About Becoming Company Director?
There is no particular criterion for the qualification to become a company director. But some factors play an active role. These are the factors:
- Age Limit: There are no age restrictions to become a company director if the individual is of legal age to come into a contract. In the case of a managing or independent director of a listed company, the candidate needs to be a minimum of 21 years. They can’t be more than 70 years old.
- Nationality: There are no specific guidelines regarding the nationality of directors. Still, at least one director on the board must be a residential director. This means he or she must have resided in India for 182 days.
- Valid Directorship: One can only hold a position at the board of directors in a maximum of 20 companies. The number limit for being a director in public companies is 10. In the case someone holds the position of a company director in more than permitted companies, he needs to resign from the required number of companies. In the case of negligence, he or she is liable to punishment and may need to pay a hefty fine.
- DIN Requirement: DIN stands for Director Identification Number. To legally hold a position at the board as a director, a person needs to obtain his DIN. It is The DIN helps to trace a particular director in case of fraud or criminal activity
- Disqualifications: Under some given conditions, the validity of a director can be nullified. The company may disqualify them from the office. These are some conditions:
Conditions That Could Disqualify a Person from Being a Director in India
- Mental Instability – A person who is not mentally stable, is deemed unfit to run a business or deliver appropriate advice. If someone is diagnosed with any chronic mental condition, he can be disqualified from being a director.
- Bankruptcy – A person who has claimed bankruptcy is not considered the right person to represent the company and be at the board of directors. It is also a condition for disqualification.
- Pending unpaid Return – A person may have to give up their position of the director if they haven’t paid their previous returns.
- Criminal Record – Anyone having a criminal record and has served seven years or more in prison is deemed unworthy of being the face of the company as it is not healthy for its market value.
The criterion for becoming a director is not much but holds its importance because it impacts the company’s image and reputation in the market. This criterion ensures the credibility of the director and hence the company.
Confused About the Director’s Role?
Starting new in the business world can be quite challenging, and at the early step, you need help from experienced professionals. Defining a company directors role and finding one can be challenging, but we are here to help you. Reach out to professionals at 3E Accounting and get assistance for business registration. We possess the knowledge and the resources to give a head start to your business along with many other services that you are going to need down the road.