The nominee director in India represents an individual proposed by an institution or a company to occupy this position in the business without actually playing an active role in the company. As specified in the word “nominee”, this person has the role of director of the company on behalf of the person who assigns the nominee and is called the nominator. The nominator offers the instructions and the requests regarding the company’s development in order for the nominee to implement them.
Starting a company in India involves assigning various directors and managers to complete the company’s board. In this case, the option to choose a nominee director in India is inferred as an advantageous service. Our expert team on company formation in India can offer you these services and more information about this process.
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Nominee Directors in India in compliance with the Companies Act law
As mentioned in Section 149 of the Companies Act stated in 2013 in India, all registered businesses must elect at least one Indian resident as a director. To be considered a resident, the law states that the individual must reside in India for at least 180 days per year.
In this case, many businesses in India opt for a nominee director as their official board of directors is composed by foreigners.
If you plan to open a company in India as a foreign investor, you can rely on our services to find nominee directors in India who are suitable for your business.
Conditions for designating a nominee director in India
Before a nominee director is designated for an Indian company, there are several conditions to follow:
- the assignment must be in conformity with the company’s corporate laws;
- individual or parties that assign the nominee must have the legal authority to proceed this action;
- the nominee must be in agreement with the company’s best interests.
For more information on taking the steps to appoint a nominee director after registering a company in India, opt for the support of our experts in company formation.
Commitments that a nominee director in India has to follow
As the nominator has to follow some rules in order to designate nominee directors in India, so the nominee has to proceed with several regulations in his/her role, such as:
- to have and act accordingly to the company’s best interests;
- the responsibilities must be fulfilled with care and rigorousness;
- keep the company’s activities monitored and in order to all regulations;
- have active presence in the board meetings that the company is initiating;
- conflict of interests must be avoided in any cases;
- must not follow to gain any self-involved advantages and must comply to pay the company damage expenses if this is happening.
Advantages for choosing nominee directors in India
Foreign companies choose to assign a nominee director in India based on relevant advantages that they offer for their businesses, such as:
- Knowledge of the local legislation. An Indian nominee director will possess the needed knowledge regarding local laws and regulations, making it easier for the company to comply to all the requirements.
- Avoiding language barrier issues. As legal documents and contracts might be written in the official language of Hindu, a nominee director from India can ease the process of elaborating these official documents.
- Local representative to authorities. The nominee director from India can represent the company for official meetings with the authorities and enterprises which require a local’s presence, such as banks or government institutions.
- Compliance with the residency requirements. To be in accordance with law regulations in India that require at least one Indian resident as a director for your company, hiring a nominee director might be the solution for you.
If you are looking for support in how to form a company in India and how to take action in choosing a nominee director for your company, our specialized company formation agents in India can provide efficient assistance.
Necessary documentation to hire a nominee director in India
Before assigning a nominee director for your company in India, there are some document requirements to consider:
- resume of the nominee which must be up-to-date;
- evidence that shows individual’s address and residency in India;
- copy of the nominee’s passport or identification document;
- non-criminal record issued by official authorities.
Furthermore, the role of a nominee director in India comes with various high importance tasks, such as keeping the company’s accounts organized, being aware of the tax regulations and keeping the payment deadlines on point. Consider taking the benefit of the support offered by our specialized accountants in India in order to have a clear vision on tax regulations, payroll in India and financial aspects and forms.
Statistics on director positions in India
While starting a company in India has become more popular over the years, official data shows that there is an impressive number of directors currently working in National Stock Exchange of India listed companies:
- 15,684 individuals occupy board roles in 2,457 companies which are part of the National Stock Exchange of India.
- Out of these 15,684 people, 12,792 hold 1 leadership position in the listed companies.
- Out of these 15,684 individuals, 7,306 have independent director positions in the listed companies.
For more information regarding choosing nominee directors in India for your company, do not hesitate to contact our specialized team.