Companies Act Section 190 — Contract of employment with managing or whole-time director

CHAPTER XII MEETINGS OF BOARD AND ITS POWERS

Commercial / Corporate

Summary

Sub-section (1) requires every company to keep certain documents at its registered office. If the contract of service with a managing or whole-time director is in writing, the company must keep a copy of that contract. If the contract is not in writing, the company must keep a written memorandum that sets out the terms of the contract.

Sub-section (2) states that the copies of the contract or the memorandum kept under sub-section (1) must be open for inspection by any member of the company, and the member does not have to pay any fee to inspect them.

Sub-section (3) provides the penalties for failing to comply with sub-section (1) or sub-section (2). The company will be liable to a penalty of twenty-five thousand rupees, and every officer of the company who is in default will be liable to a penalty of five thousand rupees for each default.

Sub-section (4) says that the provisions of this section do not apply to a private company.

Official Text

(1) Every company shall keep at its registered office,—

(a) where a contract of service with a managing or whole-time director is in writing, a copy of the contract; or

(b) where such a contract is not in writing, a written memorandum setting out its terms.

(2) The copies of the contract or the memorandum kept under sub-section (1) shall be open to inspection by any member of the company without payment of fee.

(3) If any default is made in complying with the provisions of sub-section (1) or sub-section (2), the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees for each default.

(4) The provisions of this section shall not apply to a private company.