Write notes on Resident director.

Resident Director The concept of a 'Resident Director' was introduced in India with the Companies Act, 2013, to ensure that there is always a director on the Board who has a substantial connection with India, facilitating local compliance and oversight. Legal Provision: Section 149(3) of the Companies Act, 2013, mandates the requirement for a resident director. It states: "Every company shall have at least one director who has stayed in India for a total period of not less than one hundred and eighty-two days during the immediately preceding calendar year." Key Aspects of a Resident Director: Mandatory for All Companies: This requirement applies to all types of companies registered in India, whether public or private, small or large. Minimum One Director: At least one director on the Board must fulfill this residency criterion. A company can have more than one resident director. Stay in India: The crucial condition is the physical presence or 'stay' in India. The director must have been physically present in India for a cumulative period of 182 days or more in the previous calendar year (January 1 to December 31). Calendar Year Basis: The calculation of 182 days is based on the immediately preceding calendar year, not the financial year. For Newly Incorporated Companies: The Ministry of Corporate Affairs (MCA) has clarified that for newly incorporated companies, the requirement of 182 days would apply proportionately in the year of incorporation. For example, if a company is incorporated in July, the director needs to stay for 182 days in the remaining part of that calendar year, or as clarified by specific circulars, from the date of incorporation itself. Purpose: The primary objective behind this provision is to ensure that there is always a director available in India who can be held responsible for compliance with Indian laws and regulations, and to facilitate communication with regulatory authorities. The resident director requirement is a fundamental aspect of corporate governance in India, ensuring local accountability and oversight for companies operating within the country.