Accounting And Audit 7 November 2026
182-Day Rule Tightens Resident Director Requirements for Indian Subsidiaries
The MCA's 2025 corporate reforms introduce a 182‑day rule for resident directors of Indian subsidiaries owned by foreign groups. Companies must ensure a qualified director serves at least 182 consecutive days each fiscal year, with strict penalties for non‑compliance, and the rule also impacts statutory auditor appointment and rotation requirements. Failure to meet the threshold can lead to fines, director disqualification, and potential blockage of filing statutory returns. The amendment aims to improve governance and align Indian subsidiaries with global best practices.
Key Changes
- Resident directors must serve at least 182 consecutive days in each financial year.
- Applies to Indian subsidiaries of foreign groups under Section 149(3).
- Non‑compliance attracts fines, director disqualification, and filing restrictions.
- Impacts statutory auditor appointment and rotation rules.
For full details see the original article.
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