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A Corporate Governance initiative of
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Concept, Design and Maintenance by
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THE COMPANIES ACT REGARDING NUMBER OF DIRECTORSHIPS
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No person to be a director of more than fifteen companies. |
| 275. |
After the commencement of this Act, no person shall, save as otherwise provided in section 276, hold office at the same time as director in more than fifteen companies.
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Choice to be made by director of more than fifteen companies at commencement of Act. |
| 276. |
(1) Any person holding office as director in more than fifteen companies immediately before the commencement of the Companies (Amendment) Act, 2000 shall, within two months from such commencement-
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(a) |
choose not more than fifteen of those companies, as companies in which he wishes to continue to hold the office of director; |
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(b) |
resign his office as director in the other companies; and |
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(c) |
intimate the choice made by him under clause (a) to each of the companies in which he was holding the office of director before such commencement, to the Registrar having jurisdiction in respect of each such company, and also to the Central Government. |
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(2) Any resignation made in pursuance of clause (b) of sub-section (1) shall become effective immediately on the dispatch thereof to the company concerned.
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| (3) No such person shall act as director-
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(a) |
in more than fifteen companies, after the expiry of two months from the commencement of the Companies (Amendment) Act, 2000; or |
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(b) |
of any company after dispatching the resignation of his office as director thereof, in pursuance of clause (b) of sub-section (1). |
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Choice by person becoming director of more than fifteen companies after commencement of Act. |
| 277. |
(1) Where a person already holding the office of director in fifteen companies is appointed, after the commencement of the Companies (Amendment) Act, 2000, as a director of any other company, the appointment-
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(a) |
shall not take effect unless such person has, within fifteen days thereof, effectively vacated his office as director in any of the companies in which he was already a director; and |
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(b) |
shall become void immediately on the expiry of the fifteen days if he has not, before such expiry, effectively vacated his office as director in any of the other companies aforesaid. |
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(2) Where a person already holding the office of director in fourteen companies or less is appointed, after the commencement of the Companies (Amendment) Act, 2000, as a director of other companies, making the total number of his directorships more than fifteen, he shall choose the directorships which he wishes to continue to hold or to accept, so however that the total number of the directorships, old and new, held by him shall not exceed fifteen.
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Exclusion of certain directorships for the purposes of sections 275, 276 and 277. |
| 278. |
(1) In calculating, for the purposes of sections 275, 276 and 277, the number of companies of which a person may be a director, the following companies shall be excluded, namely -
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(a) |
a private company which is neither a subsidiary nor a holding company of a public company; |
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(b) |
an unlimited company; |
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(c) |
an association not carrying on business for profit or which prohibits the payment of a dividend; |
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(d) |
a company in which such person is only an alternate director, that is to say, a director who is only qualified to act as such during the absence or incapacity of some other director. |
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(2) In making the calculation aforesaid, any company referred to in clauses (a), (b) and (c) of sub-section (1) shall be excluded for a period of three months from date on which the company ceases to fall within the purview of those clauses.
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| Penalty. |
| 279. |
Any person who holds office, or acts, as a director of more than fifteen companies in contravention of the foregoing provisions shall be punishable with fine which may extend to fifty thousand rupees in respect of each of those companies after the first fifteen. |
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