Maximum number of directorship an individual can hold – Section 165 of Companies Act 2013

As per section 165 of Companies Act 2013, no person shall hold office as a director including any alternate directorship, in more than 20 companies at the same time.

Provided that the maximum number of public companies in which a person can be appointed as director shall not exceed 10.

This means, total number of directorship an individual can hold has been fixed at 20 companies including a sub limit of 10 for public companies.

For reckoning the limit of public companies in which a person can be appointed as director, directorship in private companies that are either holding or subsidiary company of a public company shall be included.

If members of a company want to specify any lesser number of companies in which a director of the company may act as directors then they can do so by passing a special resolution.

If anyone holding directorship in more than the limit specified above then within a period on 1 year from the commencement of Companies Act 2013, choose not more than 20 companies in which he or she wishes to continue to hold the officer of director.

After deciding companies in which the director wants to retain directorship, he or she can resign his office as director in the other remaining companies and intimate the choice to each of the companies in which he was holding the office of director and to the ROC having jurisdiction in respect of each such company.

Such resignation will be effective immediately on the dispatch thereof to the company concerned.

As specified in section 165 of Companies Act 2013, no such person shall act as director in more than 20 companies after dispatching the resignation of this office as director or non-executive director thereof or after the expiry of 1 year from the commencement of Companies Act 2013 whichever is earlier.

In case of contravention to the maximum number of directorship, the person shall be punishable with fine which shall not be less than 5000 rupees but which may extend to 25000 rupees for every day after the first during which the contravention continues.