LatestCorporate Compliance 7 November 2026
182-Day Rule Forces Resident Director Presence for Foreign Subsidiaries
Under Section 149(3) of the Companies Act, any Indian subsidiary of a foreign group must maintain a resident director for at least 182 days annually. Failure to meet this requirement can jeopardize the subsidiary’s 12A and 80G tax exemptions and trigger compliance penalties.
182-Day Rule Overview
- Section 149(3) requires an Indian subsidiary of a foreign group to have a resident director present for a minimum of 182 days per fiscal year.
- Non‑compliance can lead to loss of 12A and 80G registration, exposing the company to tax liabilities and penalties.
Compliance Checklist
- Appoint a qualified Indian resident director before the subsidiary starts operations.
- Track the director’s physical presence daily to ensure the 182‑day threshold.
- Maintain proper board minutes and attendance logs as evidence for auditors.
For full details, see the original article.
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