Whole-time Director

A Whole-time Director (WTD) is a director in the whole-time employment of the company, as defined in Section 2(94) of the Companies Act, 2013. Unlike a non-executive director who only attends board meetings, a WTD works for the company on a full-time basis and draws a salary for that role. A WTD may hold specific executive responsibilities (finance, operations, technical) but does not necessarily wield the substantial powers of overall management that a Managing Director does under Section 2(54). A company can appoint both a Managing Director and one or more Whole-time Directors.

Legal basis

Appointment is governed by Section 196 (read with Section 197 and Schedule V) of the Companies Act, 2013. The term cannot exceed five years at a time, and the person must be between 21 and 70 years of age (appointment beyond 70 needs a special resolution). A WTD is also a Key Managerial Personnel under Section 203.

Whole-time Director vs Managing Director

• A WTD is essentially a full-time salaried executive director; an MD is entrusted with substantial powers of management of the company's affairs.
• Both are counted within managerial remuneration limits under Section 197 (5% of net profit for one such person, 10% collectively, 11% overall cap).

Appointment process

The board approves the appointment and terms, followed by shareholder approval at the next general meeting. A public company must file the return of appointment in Form MR-1 with the Registrar of Companies within 60 days. Private companies are exempt from both the shareholder-approval and MR-1 requirements under the MCA exemption notification dated 5 June 2015, though Form DIR-12 is still filed for the change in directors.