Section 190 of Companies Act 2013: Contract of Employment with Managing or Whole-time Director

Section 190 of the Companies Act, 2013 requires a company, other than a private company, to preserve at its registered office the service contract of a managing or whole-time director, or a written memorandum of its terms where the contract is not in writing. Members are entitled to inspect that record without payment of a fee.

What Section 190 requires

The provision is a corporate-record and member-inspection requirement relating to the terms on which a managing director or whole-time director serves the company. It applies according to the form in which the service arrangement exists:

• If the contract of service is in writing, the company must keep a copy at its registered office.
• If the contract is not in writing, the company must keep a written memorandum setting out its terms.
• The copy or memorandum must be open to inspection by any member of the company without payment of a fee.
• A private company is outside the operation of Section 190 by virtue of sub-section (4).

Section 190 - statutory text

Meaning of key terms

Managing director

Under Section 2(54) of the Companies Act, 2013, a managing director is a director who, by virtue of the articles, an agreement with the company, a resolution in general meeting or of the Board, or otherwise, is entrusted with substantial powers of management of the affairs of the company, subject to the statutory qualification in that definition.

Whole-time director

Section 2(94) defines a whole-time director as including a director in the whole-time employment of the company.

Registered office

The registered office is the company's statutory office maintained under Section 12 of the Companies Act, 2013. Section 190 specifically requires the relevant contract or memorandum to be kept there.

Compliance implications

For a company to which Section 190 applies, the practical requirement is to maintain an accessible and up-to-date copy of the written service contract or, if there is no written contract, a memorandum recording its terms. The record should be available at the registered office for inspection by members without a fee.

The section does not itself prescribe a special filing form for this record. It is principally a record-retention and inspection obligation. Other provisions of the Companies Act, 2013 may separately govern appointment, remuneration, disclosure of interests or related arrangements involving directors.

Penalty for non-compliance

Under Section 190(3), non-compliance with the record-keeping or inspection requirements can result in a penalty of Rs. 25,000 for the company and Rs. 5,000 for each default for every officer who is in default.

Private company exemption

Section 190(4) expressly provides that Section 190 does not apply to a private company. Accordingly, the specific record and inspection duties created by this section apply to companies other than private companies, subject to the Companies Act and applicable notifications.

Official reference

For the authoritative statutory text and subsequent notifications or amendments, refer to the official resources linked in the sidebar. The statutory text should be checked together with applicable amendments and notifications when advising on a specific transaction or compliance issue.