Professional Documents
Culture Documents
Definition of Directors
Section 2(13) of the companies act states that;
Occupying the position of director
Directors include any person
DIRECTORS
objectives.
Duties of directors
Approving annual budgets Ensuring the availability of financial resources.
Directors as agent
Company being an artificial person can act only
through director.
Play the role of the negotiator
Ratification.
Directors as trustee
Power to make calls
Power to forfeit shares Power to issue further capital Power to approve transfer of shares
Appointment of directors
Rules regarding appointment of directors
Minimum no. of directors Public -3 Private-2 Cannot be a director of more than 15 companies
Qualifications
Diversity Industry specific experience
Leadership Quality
An area of expertise
Time
Disqualifications
Unsound mind
Undischarged Insolvent
Not paid calls for six months Disqualified by the court of law on the ground of fraud
Powers of directors
General powers Powers exercisable with the approval of the board
shareholders.
Rights of Directors
Right to attend and participate in the meeting Right to remuneration and compensation. Internal communications
Liability of Directors
Breach of trust- liable for breach of trust or secret
profits.
Ultra vires acts- Jointly and severally liable to the
Liabilities
contd
Removal of directors.
There are three modes of removal of diretors.
By Shareholders By Tribunal By Central Government
Managing director
A managing Director is a Person with vast substantial powers, and could be appointed by an agreement or by resolution passed in general meeting.
Public and private company having paid up capital of 5
governtment.
2 companies.
Remuneration is paid either monthly or according to
of central government.
An MD is disqualified if he is un discharged insolvent.