DEFINITION OF THE DIRECTOR

POSTIONS HELD BY THE DIRECTORS:

MANAGING DIRECTOR
MANAGER
WHOLE TIME DIRECTOR

OFFICER IN DEFAULT

Section 2(60) of the Companies Act, 2013,

provides that for the purpose of any provision
in this Act which enacts that an officer of the
company who is in default shall be liable to
any penalty or punishment by way of
imprisonment, fine.

KEY MANAGERIAL PERSONNEL

CHANGE IN LAW
CONCERNING DIRECTOR
ACCORDING TO NEW
COMPANIES ACT 2013

 At least one women director for

prescribed class or classes of
companies.
The woman directors
is been
mentioned in section 149(1) of the
companies act 2013
At least one director shall be a
person who has stayed in India for at
least 180 days in e previous calendar
year.

Listed companies may have directors

1 directors
elected by small
companies.

COMPANIES ACT 1956

COMPANIES ACT 2013

According to 1956 act the

maximum limit of directors in a
company was 12
Approval of central government
was necessary.

According to new companies act, 2013

the maximum limit of directors in a
company has been increases from 12
to 15.
Further to that can be made by passing
the special resolution.
Approval of central government has
been dispensed off.

A company can become a

director for only 15 companies

A company can become a director for

only 20 companies instead of 15.
Out of this 20 companies he cannot be
directors of more than 10 public
company.

The amount to be deposited

along with the notice of
nomination to any person to the
office of directors was Rs.500.

The amount to be deposited along with

the notice of nomination to any person
to the office of directors has been
increased from Rs.500 to Rs. 100000
or such higher amount as may be
prescribed.

ADDITIONAL/ALTERNATE/NOMINEE
DIRECTOR

INDEPENDENT DIRECTORS
Separate definition of independent
directors is there under section 2 (47) of
the companies act 2013.
Listed company to have at least 1/3rd of
the total number of directors as
independent directors.
No. of independent directors for an
unlisted company and its subsidiaries will
be prescribed by the central government.

ROLE AND FUNCTIONS OF THE INDEPENDENT

DIRECTORS:
The independent directors shall:

The(i)
independent
directors shall:
help in bringing an independent judgment to bear on the Boards
deliberations especially on issues of strategy, performance, risk
(i) management,
Help in bringing
an independent
judgment
bear onofthe Boards
resources,
key appointments
and to
standards
deliberations
especially on issues of strategy, performance, risk
conduct;

management, resources, key appointments and standards of

(ii) bring an objective view in the evaluation of the performance of
conduct;
board and management;

(ii) Bring an objective view in the evaluation of the performance of

(iii) scrutinize the performance of management in meeting agreed
board
and management;

goals and objectives and monitor the reporting of performance; (iv)

satisfy themselves on the integrity of financial information an
(iii)dScrutinize
thecontrols
performance
management
in meetingare
agreed
that financial
and the of
systems
of risk management
goals
andand
objectives
and monitor the reporting of performance;
robust
defensible;

(v) Safeguard the interest of all stakeholders, particularly the

minority shareholders;
(vi) Balance the conflicting interest of the stakeholders;
(vii)Determine appropriate levels of remuneration of executive
directors, key managerial personnel and senior management and
have a prime role in appointing and where necessary recommend
removal of executive directors, key managerial personnel and
senior management; and
(viii) Moderate and arbitrate in the interest of the company as a
whole, in situations of conflict between management and
shareholders interest.

APPOINTMENT OF DIRECTORS
(Section 152of the companies act 2013)

APPOINTMENT OF OTHER
DIRECTORS

BOARD MEETINGS

COMMITTEE MEETINGS

BOARD MEETINGS:

COMMITTEE MEETINGS:

RESPONSIBILITIES OF DIRECTORS

The

major responsibility of the Board of Directors is to

direct the affairs of the company and to exercise such
control that the wealth and wealth creating assets of the
company are protected.

The responsibilities under The Companies Act, 1956 includes:

Keeping proper book of accounts and preparing annual accounts and directors report for
presentation to the companys shareholders;

Filing of accounts and returns annually with the Registrar of Companies, Income Tax

departments and other statutory departments;

Filing of various resolutions with Registrar of Companies and seeking approvals from The
Registrar of Companies, Company Law Board, Central Government and High Court.
Informing The Registrar of Companies of the appointment or retirement of any director or
the company secretary or of any change in the situation of the companys registered office
and of many other events including allotments of shares;
Appointing auditors;
Calling and holding Annual General Meetings each year, at which the annual accounts are
presented and;
Making sure that the company acts strictly in accordance with the powers and rules set out
in its memorandum and articles of association

DUTIES OF DIRECTORS
(Section 166 of the companies act 2013)

SIGNIFICANT PROVISIONS
RELATED TO DIRCTORS

RESTRICTI
ONS FOR
DIRECTORS
LOAN TO
DIRECTOR
S

RESTRICTIONS FOR DIRECTORS

LOAN TO DIRECTORS
( Section185 of the companies act 2013)

DISQUALIFICATION AND
VACATION OF THE
DIRECTORS

NEW DISQUALIFICATIONS OF DIRECTORS

( Section 164 of the companies act 2013)

VACATION OF
DIRECTORS
( Section 167 of the
companies act 2013)

VACATION OF OFFICE OF DIRECTORS

RESIGNATION
OF THE
DIRECTOR
(Section 168 of the
companies act 2013)

A director may resign from his office by giving a notice in writing to the
company and the board shall take note of same. The company shall intimate
the registrar and shall also place the fact of registration in the report of the
directors laid in the immediately following the general meeting by the
company.
A director shall also forward a copy of his resignation to the registrar along
with the detailed reason within 30 days of resignation.
The resignation shall take effect from the date on which the notice is received
by the company or the date specified by the director in the notice, whichever
is later.
The directors who has resigned shall be liable even after his resignation for
the offences which occurred during his tenure.

CASES

Registrar of Companies V. Orissa Paper Products

Ltd.,
(1988) 63 Comp cases 460 (Ori)
Resignation of a director must be addressed to the
Company. Letter of resignation addressed to third party
shall have no effect

Chokkalingam Chettiar V. Official Liquidator

1943 13 Comp. cas. 263 Mad.
A director who has resigned would not be liable for
anything that happens subsequently.

S.B. Shankar
Amman
Corporation
The petitioner
who wasV.
the
ChairmanSteel
and the
director of the accused
(2002) 51 CLA 341
company tendered his resignation both as Chairman and Director on
4.10.1999 and his resignation was sent to the Registrar of Companies on the
same date.
The respondent company on the other hand has alleged in its complaint
that 16 cheques issued by the company between 3.2.2000 and 15.2.2000
amounting to Rs.17.50 lakhs had bounced and sought his prosecution on
the ground that the petitioner Chairman was responsible for the conduct of
the day to day affairs of the company.
The court held that where the resignation letter states that it has to take
effect immediately, the date of resignation letter is taken to the date on
which the director has resigned i.e., 4.10.1999. He was no longer on the
board after that date either as director of Chairman.
All the cheques were drawn between 3.2.2000 and 15.2.2000 during which
the period the petitioner did not function as Chairman and director of the
company. Also he was not in charge and responsible for the affairs of the

REMOVAL
OF
DIRECTOR
S
(Section 169 of
the companies
act 2013)

KHETAN INDUSTRIES PRIVATE

LIMITED
VS.
MANJU RAVINDRA PRASAD
KHETAN
In this case it was held by the court that the
shareholders have a right to remove the
directors under section 284 by passing
ordinary resolution and section 284
provides an inbuilt mechanism for the
enforcement of the right and civil court has
no jurisdiction to entertain the suit for
removal of director.