Almost every foreign founder asks a version of this, usually quietly, and almost nobody answers it straight — least of all a provider charging for a nominee directorship. The statutory position is clearer and more reassuring than the internet suggests. The genuine risks are elsewhere, and they are practical rather than legal.
Shareholders appoint and remove directors; directors run the company day to day. A 99% shareholder controls the composition of the board, which is the lever that matters.
An ordinary resolution after special notice, with the director given a right to be heard. Done correctly it is straightforward; done sloppily it is challengeable, which is the only real reason these things go wrong.
Not the shareholding — the digital signature token, the MCA and tax portal logins, the sole bank signatory, and a registered office at somebody else's address.
Reserved matters and affirmative-vote rights bind the company only where they are in the articles. An agreement sitting outside them protects you against a person, not against the company.
Somebody genuinely willing to act, documented properly, with an indemnity and a clear scope. A provider who calls it a formality is telling you how they will behave when it stops being one.
Holding almost all the equity with one India-resident director.
Where no group person is resident in India.
Where the relationship with the Indian director has broken down.
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💬 Get my quote →Yes, in the ordinary case. A company may remove a director before the end of their term by ordinary resolution — a simple majority of shareholders voting — after special notice has been given, and the director must be given a copy and a chance to be heard. At 99% you have the votes. Two things to plan for: the company must always have at least two directors with at least one resident in India, so you need a replacement lined up before rather than after; and the removal has to follow the statutory procedure properly, because a defective process is the one thing that turns a clean removal into a dispute. Narrow exceptions exist, mainly a director appointed by the Tribunal or under proportional representation, which almost never apply to a private subsidiary.
No. There is no shareholding requirement for a director in an Indian private company, and the resident director requirement is about residence, not ownership. A director can hold zero shares. If a provider tells you the India-resident director must hold equity, that is not the law — and it is worth asking why you are being told it.
More than the shareholding suggests, which is why the appointment matters. Directors manage the company, and a director who is also the sole bank signatory can move money. A director holding the digital signature token and the portal credentials can make filings. A director can convene meetings and, with the other director, pass board resolutions. What a director cannot do is transfer your shares, dilute you without a shareholder resolution, or remove you as a shareholder. The exposure is operational, not proprietary — and it is managed by controlling the tokens, the mandate and the office, not by the cap table.
Two things, in our experience. First, that the person is not genuinely willing to act — so when a filing needs a signature or a bank needs a visit, nothing happens, and the company silently falls out of compliance while you are told it is fine. Second, that the arrangement is undocumented, so when you want to replace them there is no resignation on file, no indemnity, and no clarity on who holds what. Neither risk is about them seizing the company. Both are about being unable to operate it.
Five practical things. Hold your own digital signature and the portal credentials rather than leaving them with an adviser. Make sure the bank mandate requires your signature for anything material. Use a registered office you control, or at least one where you receive the post. Put reserved matters and affirmative-vote rights in the articles, not only in a shareholders' agreement, because only the articles bind the company. And take an undated resignation letter and an indemnity from any nominee appointment at the time it is made, when it is easy, rather than when you need it.
Yes. There is no citizenship bar on being a director or a managing director of an Indian company, and you can hold the role while living abroad. A managing director does have to satisfy the conditions the Companies Act sets for that office, and the company still needs a separate India-resident director. What being a director does not do is give you the right to be in India — that is a visa question and belongs with an immigration specialist.
Deal with the practical position before the legal one. Establish who holds the digital signature tokens and the portal logins, what the bank mandate actually says, where the statutory registers are, and whether the registered office address is one you control. Then take the removal through the proper statutory route with a replacement resident director ready. A shareholder with a clear majority is in a strong position here; what loses time and money is discovering halfway through that the only working signature belongs to the person being removed.
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