Section 149(3) requires every company to have at least one director who has stayed in India for a total period of not less than 182 days during the financial year. The test is physical presence, not citizenship, residence or domicile. A foreign national can satisfy the requirement if the person is physically present in India for the requisite number of days; an Indian national who is abroad for most of the year may fail it.
The 182-Day Calculation
The 182 days are counted within the financial year (1 April to 31 March). The director need not be present continuously; the total number of days of physical presence is what matters. The company should maintain a travel and presence record for the resident director, supported by passport entries, boarding passes or other evidence. The calculation should be done before the financial year closes, so that a shortfall can be addressed.
The Newly Incorporated Company Relief
The proviso to Section 149(3) applies a proportional requirement for a newly incorporated company: the 182-day test is applied proportionately to the period from incorporation to the end of the financial year. A company incorporated in January cannot be expected to have a director present for 182 days in a three-month period; the proportional rule accounts for that. The relief is transitional; it does not apply to a company that was incorporated in an earlier year.
The Interaction with Other Requirements
The resident director can be an executive or non-executive director, and can also be the woman director or an independent director if the other tests are satisfied. The requirement applies to every company, including a private company, a public company and an OPC. A foreign company with an Indian presence may have a separate requirement under the foreign-company provisions, but an Indian subsidiary must satisfy Section 149(3) in its own right.
The Compliance Record
The company should maintain the resident director’s presence record, the board minutes recording the appointment, and the ROC filings. A shortfall discovered at the end of the year cannot be cured retroactively; the director’s presence during the year is a factual matter. The appointment should be structured so that at least one director can satisfy the test, and the presence record should be monitored during the year.
Call to Action: We advise companies on resident-director compliance, the 182-day calculation and the newly incorporated relief. For a resident-director review, contact office@anujdesaiassociates.com, Ph No. 9619456656, Website https://anujdesaiassociates.com, LinkedIn linkedin.com/in/ca-anuj-desai-122547230.