The Ministry of Corporate Affairs (MCA) has notified that effective April 1, 2014, every company must have at least one resident director. Resident Director has been defined as one who has stayed in India for at least 182 days in the previous calendar year.
As per provision of Section 149, this needs to be complied with immediately and there is no transition timeline in this. This provision applies to all Companies including private companies. Foreign Companies with Indian Subsidiaries but with only foreign directors will be impacted by this provision and they will now have to start having Indian Directors on the Boards.
In case of any contravention, then a penalty of up to INR 10,000 will be imposed on the company and every officer of the company. Further, in case of continuing default, a fine of INR 1,000 per day till the date this default continues is applicable.