The fact that a number of foreign corporations are now establishing business operations in India confirms the belief that India is a land of amazing chances. There has been a steady stream of global multinational corporations (MNCs) expanding their business in India in recent years.
With the rise in international cooperation, a number of Indian enterprises have found that having foreign staff and directors as part of their operations is useful. Appointing trusted foreign people to enterprises has benefited the companies in a variety of ways. This is frequently the initial step in expanding a company’s international reach.
According to the Companies Act of 2013, a private limited company is the best corporate vehicle for enterprises with a large workforce and those looking to expand quickly. It is a legal entity made up of two or more people who have come together to fulfil a similar goal. The company should have a minimum of two members and a maximum of 200. If the corporation wants to expand its membership, it must change to a public company.
There are no limits on appointing a foreigner or an NRI director to a private limited company in India as long as the appointment complies with the regulations of the Foreign Exchange Management Act, 1999 (FEMA) and the Securities and Exchange Board of India.
Is it possible for an NRI to become a director of a private limited company? In a private limited company, you can be a director.
Although a private limited corporation is a separate legal entity, it relies on natural beings to conduct business. A company’s general functions and administrative tasks are entrusted to its director, who must ensure that they are carried out in accordance with the Companies Act, 2013. The company’s directors are referred to collectively as the Board of Directors, and they work on critical problems that impact the organization’s well-being. Their judgments and actions have a significant impact on the company’s success.
On behalf of the firm, the directors enter into contractual responsibilities. Due to the restricted culpability,
Consent of the Director in Form DIR 2: The Procedure for Appointing an NRI as a Director of a Private Limited Company
Obtaining the consent of the prospective director in form DIR 2 together with the requisite documentation is the first and most important stage in selecting an NRI director.
Director Identification Number (DIN) and Digital Signature Certificate (DSC):
The appointment of the NRI director is done during the company’s annual general meeting. An extraordinary general meeting (EGM) may be called for this purpose, and all members and shareholders of the company must be notified. When the EGM notification is submitted to the members and shareholders, the meeting is held as scheduled, and the required motions to appoint the NRI director are passed.
The appointment letter is given to the person who has been elected once the resolution to appoint the NRI director has been passed. The letter contains information about the terms and circumstances of the appointment, including the NRI director’s salary package.
Filing of Form DIR 12: Once all of the requisite formalities have been completed, the firm must file Form DIR 12 with the Registrar of Companies (RoC) within 30 days of the NRI director’s assignment, together with the required papers.
Documents Required for Appointment of an NRI Director:
- In order to appoint an NRI director in a private limited company, the following documents are required:
- Photographs of the individual who would be appointed as the NRI director in passport size.
- A copy of the individual who will be appointed as the NRI director’s valid passport.
- Copies of notarized address proofs, such as utility bills such as telephone bills and energy bills.
- If appropriate, provide your PAN (Permanent Account Number).
- AADHAR card or other forms of identification may be required.
- The consent to act as director is submitted on Form DIR 2.
A copy of the resolution passed by the corporation regarding the appointment of the NRI director.
- Copy of the resolution pertaining to the appointment of the NRI director that was passed in the company.
- Copy of the notice sent to the shareholders and members regarding the extraordinary general meeting.
All the documents listed above must not only be self-attested by the candidate who intends to be elected as the NRI director but also must be duly notarised and apostille.