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CA Foundation · Business Laws · The Companies Act, 2013

Zenith Pharma Ltd, a listed public company, appointed Mr. Iyer as a director. Mr. Iyer is already a director in 19 other companies, of which 8 are public companies. Considering only the maximum number of directorships permitted, what is the position of his appointment?

The appointment is valid. A person can hold directorships in a maximum of 20 companies, and at most 10 of them can be public companies. With this appointment Mr. Iyer holds 20 directorships in total and 9 public company directorships, so both limits are satisfied.

  1. AValid, since he can hold up to 20 directorships in total, including private companiesCorrect
  2. BValid, since the limit applies only to private companies
  3. CInvalid, since a person can hold directorship in at most 10 public companies
  4. DInvalid, since a person cannot hold more than 15 directorships

Explanation

A person may be a director in a maximum of 20 companies, of which at most 10 can be public companies, counting a private company that is a holding or subsidiary of a public company as public. Mr. Iyer would have 20 directorships in total after this one, which is within the limit. His public company count would be 9, below 10.

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