Can a director also work as a salary employee or consultant

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Can a director also work as a salary employee or consultant

Yes, that is possible. A director of one company may also work for another as an employee. The Companies Act of 2013 states that there is no such clause prohibiting directors from working for other businesses. Although the responsibilities and functions of a director and an employee differ greatly, they are both equally important. A person may experience some consequences if he wants to hold both positions. Below is a list of the effects:

Conflict of interest:

When two companies operate in the same industry, there is a good likelihood that some of their issues may intersect (the director’s company and another company where he works). Numerous issues could arise as a result of this, such as a potential conflict of interest or a breach of confidentiality, among others.

Contract of employment:

If the contract of employment for a director of a firm expressly forbids the director from working as an employee in another company or anywhere else, the director may be subject to legal consequences.

Shortage of time:

A person may not have enough time to handle both jobs adequately. He can fully concentrate on his work as an employee for another company by meeting deadlines and performing other tasks connected to his job, or he can concentrate on his work as a director by hiring, delegating tasks, and performing other tasks. These can be very difficult.

Low efficiency-

The director plays a big part in the business, making decisions and controlling risks. If a person holds dual employment—as a director of one business and an employee of another—the quality of their position will decline.

Conclusion

To Final Conclusion, We could contend that the Companies Act of 2013 does not contain any particular language that precludes a director from working for another firm. A director may experience various numerous issues, such as negative legal outcomes, time constraints, etc., if he opts to join another company as an employee.

Tags: appointment of directors

2 years ago

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