Rajeev (Company Secretary) 20 October 2010

Minimum No. of Directors

Greetings Members,

As per the provisions of the Section 252 of the Companies Act, 1956, a Public Limited Company needs to appoint at least 3 Directors in the Company. This minimum limit shall be maintained for ever till the time period the Company is not either wound up or become defunct.

My query is that, if suppose for a period of say 1 year this statutory minimum requirement of 3 Directors goes below 3 & not complied with, which means for a period of 1 year, if Company operates and transact all regular businesses with 2 Director, then what will be the repercussion. What penal provisions will be imposed on the Company as per the provisions of Companies Act, 1956.

Waiting for your quick response.

Thanks & Best Regards

Rajeev

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2 Replies

Deepak Shenoy (CS & LLB Student) 21 October 2010

Just did some R&D.......if the number of directors fall below minimum requirement, then Comapny and every officer who is in default shall be liable to a fine upto Rs.5,000 and further fine upto Rs.500 per day after the first during which the default continues (Section 629A)