The fact that many foreign businesses are already setting up shop in India serves as further proof that this country offers many fantastic chances. Multinational businesses (MNCs) from around the world have steadily increased their activities in India in recent years.
Many Indian enterprises have found it advantageous to hire foreign personnel and directors as a result of the rise in international cooperation. The businesses have benefited in a variety of ways from hiring reputable international employees. This is frequently the initial step in expanding the firm internationally.
A private limited company Registered in India is the most appropriate corporate organization for enterprises with a sizable employee base and for those looking to expand more quickly, according to the 2013 Companies Act. It is a formalized partnership between two or more people created to carry out a certain mission. There should be no more than 200 people employed by the company. The business must become a public company if it wants to grow its membership.
There are no restrictions on deputizing a foreigner or an NRI director for a Private Limited Company Letterhead in India, provided that the appointment complies with the terms of the Foreign Exchange Management Act, 1999 (FEMA), the Securities and Exchange Board of India Act, 1992 (SEBI Act), and the Companies Act, 2013.
Can an NRI Hold a Directorship in a Private Limited Company? An administrator in a private limited company:
Even though a Private Limited Company is a separate legal entity, it nevertheless needs natural people to carry out its business operations. The general duties and administrative tasks of a company are the responsibility of the director, who is also responsible for ensuring that they comply with the Companies Act of 2013. Together, the company's directors are referred to as the Board of Directors, and they work on significant issues that have an impact on the organization's welfare. They have a significant impact on the company's development through their judgments and deeds.
Contractual commitments are made on the company's behalf by the directors. The members or directors are not, however, solely liable for the debts and obligations of the firm because a private corporation provides a Limited Liability firm. When allocating and transferring shares of the corporation, the directors are crucial.
The steps for selecting an NRI to serve as a director of a private limited company are as follows:
Some steps for selecting an NRI to serve as a director of a private limited company are
Obtaining the prospective director's consent in Form DIR 2 along with the necessary documentation is the first and most important stage in the appointment of an NRI director.
A director must possess a digital signature certificate (DSC) in order to digitally sign forms and documents. A director identification number (DIN) is also required. In addition, each member of the board of directors is required to obtain a DIN. Every director, including NRI directors, receives a unique 8-digit number called a DIN. If an NRI director does not already have a DIN, they must advise the company of this fact, following which they can apply for one using form DIR 3 and have a special resolution passed by the company. The KYC documents must be provided when submitting form DIR 3 KYC.
Board Meeting: The company's annual general meeting is where the NRI director is appointed. To accomplish this, a special general meeting (EGM) may be called, and all company shareholders and members must be notified. Once the members and shareholders have received the notification of the EGM, the meeting is held as scheduled and the required motions are enacted to nominate the NRI director.
Release of Appointment Letter: The appointment letter is given to the person thus elected when the resolution to appoint the NRI director has been approved. The letter includes information about the appointment's terms and conditions, including information on the NRI Director's compensation plan.
Form DIR 12 must be filed by the firm with the RoC filled out within 30 days of the day the NRI director was assigned, together with the required papers, once all the appropriate processes have been taken.
Documents Required to Be Filed Before Naming an NRI Director:
The following paperwork must be submitted by law before an NRI can be appointed as a director of a private limited company:
passport-size pictures of the candidate for NRI directorship.
a copy of the candidate's current passport is required for the NRI director position.
Copies of address proofs, such as utility bills like phone and power bills that have been properly notarized, are also acceptable.
if applicable, PAN (Permanent Account Number).
a copy of the notification of the special general meeting that was sent to shareholders and members.
The candidate who hopes to be chosen as the NRI director must not only self-attest all of the aforementioned documents but they must also be properly notarized and apostilled.
Read Our Other Blog Can Shares in a Private Limited Company Be Transferred?
to Know More About Private Limited Company Registration in India