Section 165. Number of directorships
(1) No person shall hold office as a director, including any alternate directorship, in more than twenty companies at the same time:
Provided that the maximum number of public companies in which a person can be appointed as a director shall not exceed ten.
Explanation I.—For reckoning the limit of public companies, directorship in private companies that are either holding or subsidiary companies of a public company shall be included.
Explanation II.—For reckoning the limit of directorships of twenty companies, directorship in a dormant company shall not be included.
(2) Subject to sub-section (1), the members of a company may, by special resolution, specify any lesser number of companies in which a director of the company may act as director.
(3) A person holding office as director in companies exceeding the limits immediately before commencement of this Act shall, within one year, choose the companies in which he wishes to continue, resign from the remaining companies and intimate his choice to the companies and the Registrar.
(4) Resignation made pursuant to sub-section (3) shall become effective immediately on dispatch to the company concerned.
(5) No such person shall act as director in more than the specified number of companies after dispatching resignation or after expiry of one year from commencement, whichever is earlier.
(6) If a person accepts an appointment as director in violation of this section, he shall be liable to a penalty of two thousand rupees for each day after the first during which the violation continues, subject to a maximum of two lakh rupees.
