Legal Opinion regarding Nominee Directors.

Mr. Z

Address….

Dear Sir,

RE:     Legal Opinion regarding Nominee Directors.

We refer to your letter dated February 14, 2008 on the above subject.

From perusal of your letter it is appears that, Company 1 (“Company 1”) is a subsidiary of Company 2 (“Company 2”). Company 1 has two shareholders – Company 2 having shareholding of 99.9% and Mr. X having shareholding of 0.1%. The Board of Directors of Company 1 consists of 3 (three) Directors nominated by Company 2 only and have no representation from the other shareholder Mr. X.

In these circumstances, you require our legal opinion as to whether the 3 nominated Directors of Company 2 will be treated as one director for determination of the 2 (two) minimum directors required for a private limited company to comply with Section 90 of the Companies Act 1994

OUR OPINION:

There is no difference between a normal director and a nominee director under the Companies Act 1994 (“the Act”). Provided that the 3 (three) nominated Directors of Company 2 have been duly appointed in accordance with the Act, these directors shall be treated as three separate directors and the requirement under Section 90 of the Act would be satisfied.

If you have any further inquiries please do not hesitate to contact us.

Thanking you.

Yours truly,

………………….

For: “The Lawyers & Jurists”

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