Chapter XII - Meetings of Board and Its Powers
Section 190
Section 190: contract of employment with managing or whole-time director
Section 190 requires every company, other than a private company, to keep at its registered office a copy of the written service contract of a managing or whole-time director or, if the contract is not in writing, a written memorandum of its terms. Members may inspect these without fee.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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.
Introduction
A default attracts a penalty of twenty-five thousand rupees on the company and five thousand rupees on every officer in default, for each default.
Section 190 commenced on 1 April 2014 under S.O. 902(E). The India Code consolidated text shows no amendment, and its text matches the 2013 Gazette.
Key takeaways
Copy or memorandum
Keep a copy of the written contract, or a written memorandum of terms if the contract is oral.
At the registered office
The documents must be kept at the registered office.
Free inspection by members
Any member may inspect them without payment of fee.
Private companies excluded
Sub-section (4) says the section does not apply to a private company.
What must be kept
Under sub-section (1), every company must keep at its registered office: (a) a copy of the contract of service with a managing or whole-time director, where it is in writing; or (b) where it is not in writing, a written memorandum setting out its terms.
Inspection
Under sub-section (2), the copies or memorandum are open to inspection by any member of the company without payment of fee.
Penalty and exclusion
Under sub-section (3), if any default is made in complying with sub-section (1) or (2), the company is liable to a penalty of twenty-five thousand rupees and every officer in default to a penalty of five thousand rupees, for each default. Under sub-section (4), the section does not apply to a private company.
Practical preparation
Collect the signed service agreement of every MD and whole-time director; prepare a written memorandum where terms were agreed orally; file the documents at the registered office; update them when terms change; allow member inspection without fee.
Exemption notifications issued under section 462 can modify how some provisions apply to particular classes of companies (for example private, Government, Section 8 or Nidhi companies); check whether any applies to your company before relying on this guide.
Practical checklist
Do
- Reduce oral arrangements with an MD or whole-time director to a written memorandum.
- Keep the latest version, including amendments, at the registered office.
Avoid
- Do not charge members a fee for inspection.
Illustrative example
Hypothetical: oral arrangement with a new whole-time director
An unlisted public company appoints a whole-time director on terms agreed in a meeting but never signed.
Memorandum
The company secretary prepares a written memorandum of the agreed terms.
Keep
It is kept at the registered office.
Inspect
A member who asks to see it is allowed to inspect it without fee.
Outcome
- Without the memorandum, the company would face a penalty of twenty-five thousand rupees and the officer in default five thousand rupees.
Glossary
- Whole-time director
- A director in the whole-time employment of the company, as defined in section 2(94).
- Managing director
- A director entrusted with substantial powers of management, as defined in section 2(54).
Frequently asked questions
Does section 190 apply to private companies?
No. Sub-section (4) excludes private companies.
What if there is no written contract?
The company must keep a written memorandum setting out the terms of the arrangement.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026