Respected Seniors,
Please help me to resolve the puzzle wether our Indian Act protects the concept of "Pseudo Director".
If yes then in which fashion and if not then why.............please help me..... :? :? :?
I am working in Software development uk based company where the staff strength is of 20 and ther are only three people in India mgmt Team and that are two Project Managers and one is myself.
Very recently my MD has visited to India and asked my views on this concept of " PSEUDO DIRECTOR"which he wants to be offer to these two project managers who are actually handling the India operations from last 6 years very honestly.
please pleaseeeeeeeeeee let me know and explain me in brief about this and if Indian laws doesnot protect this concept then is there any other designation which will give them proxy authority..
Your help in this regard is highly appriciated.
Thanks & Regards,

From India, Mumbai

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Dear Mona,
If you talking about the concept of Legallity then please look up Companies Act, 1956. It is under the Companies Act it is described what types of Directors a Company can have which will be recognised by the Law.
As far as I know the concept of Pseudo Directors are not present, here as I can understand the designation given to pseudo directors are - President, Executive President, Vice President, Executive Director ect.
Revert back with details for further help.

From India, Thane
Dear Mona,
The term Director is only described in Company's Act, there is no other Act which defines the term and whenever the term is used they all say refer to Company's Act, 1956.
You can see the Act online by clicking on the link provided below:
The designation and responsibilities can be decided by the Company but to get it done legally you are bound by the Companies Act.
Like you can designate somebody as Director and that is no issue but that person will not be eligible for any statutory status unless he qualifies as per the Act.

From India, Thane
Dear All, Why you all are so quiet, please help and provide your inputs I need to present this information to My M.D. Thanking in anticepation. Regards, Mona
From India, Mumbai
Dear Seniors, why no one answering my query its really urgent for me. Ppleaseeeeeeeeeeeeee helppppppppppp :cry: :cry: :cry: :cry: :cry: :cry: :cry: :cry: :cry: :cry: :cry: :cry: Regrads, Mona.
From India, Mumbai
Dear Mona, What is to be said has already been said please let us know what are your further queries?? Regards, SC
From India, Thane
Hi Mona,
The Companies Act recognises only Director, not pseudo-Director.
If your Indian operations is registered as a company under the Companies Act, only then you can appoint Directors for the Indian entitiy. Otherwise, as per law, pseudo-Director or proxy-Director does not have any legal position.
Generally speaking, a person becomes a Director if :
- he is a signatory to the Memorandum & Articles of Association (which are required for company registration)
- he has substantial stake in the company (more than 20%)
- he is nominated to the Board of Directors by a major shareholder
Since none of these criteria apply, these 2 people cannot be designated Director, assuming from the text of your query that your Indian operations are not not registered in India as an Indian company.
You could frame any other designation for these 2 people, like Project Director or something, but this would be relevant only internally, not statutorily.
Warm regards,

From India, Gurgaon
Dear Swastic,
Please do not feel offended, I am thankful to you for your speedy help :) but wondering why other seniors not posting their views aginst the query asked.
Hope you will understand me :cry:
Best Regards,

From India, Mumbai
Dear Mona, You dont have to try dubious designations as 'pseudo-director' and find ways of circumventing the law of the land. Under any law, pseudo is pseudo.
If the organisation is trying to create a functional role for delegation of powers, they could think of having positions such as 'Additional Director'. Alternately, they can also delegate executive powers to someone by designating the person as 'Director-in-charge'.
The above positions are pseudo in nature but carries executive authority.

From India
Dear Mona,

The concept of Pseudo Director is non-existent in India. The Board of Directors and Memorandum & Article of Association govern the Directors in any Company under the Companies Act, 1956, in India. Director-by-Proxy is applicable, but in certain cases only.

Your expat Directors may not conceptually or legally clear about the status in India. Normally, for Directorship with foreign origin, the better routes are being a 100 % subsidiary of the parent Company abroad or Joint Ventures. Under RBI guidelines and the above referred Act, there are restrictions on the Directorship of Expats.

You would be well served and will get a quick answer in case you contact your Finance/Secretarial Department or your Company's Chartered Accountant Firm who will be able to guide you exactly on the latest status on Directorship of Companies/Firms.

While I can provide you lengthy details on the Directorship status (better served face-to-face), do keep your cool and contact either of the above to get an urgent and correct reply.

For more help, do revert without hesitation.


Rahul Kumar

From India, New Delhi

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