Answer the following: (a) Sudipto was appointed as Director of Pragati CNC Machines Limited. He already holds directorship in nine public companies and one private company which is a subsidiary of a public company. Decid

CS Executive · Company Law · PYQS · December 2023
Answer the following: (a) Sudipto was appointed as Director of Pragati CNC Machines Limited. He already holds directorship in nine public companies and one private company which is a subsidiary of a public company. Decide the validity of his appointment.

Answer & Explanation:

According to Section 2(71) of the Companies Act, 2013, a subsidiary of a public company is deemed to be a public company even when it continues as a private company in its Articles. A director can hold a maximum of 10 directorships in public companies as per Section 165(1) of the Act and as per its Explanation I 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. Sudipto is already holding directorship in 10 public companies including one private company which is deemed to be a public company. Hence, Sudipto cannot be appointed as director in Pragati CNC Machines Limited. His appointment is invalid.

Topics: Appointment and Qualification of Directors

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