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The document provides information on directors of companies. It defines what a director is, outlines the duties and responsibilities of directors which include statutory duties like attending meetings and fiduciary duties like acting in the best interest of the company. It also describes the different types of directors, qualifications required to become a director, number of directors required, restrictions on directorships, ways directors can be appointed, and liabilities of directors.

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27 views

Presentation 1

The document provides information on directors of companies. It defines what a director is, outlines the duties and responsibilities of directors which include statutory duties like attending meetings and fiduciary duties like acting in the best interest of the company. It also describes the different types of directors, qualifications required to become a director, number of directors required, restrictions on directorships, ways directors can be appointed, and liabilities of directors.

Uploaded by

dimplevishwakarma
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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LLOYD

BUSINESS
SCHOOL
PRESENTATION
ON
DIRECTOR
PRESENTED BY
1 . KRISHNANDAN

2. KHUSHBOO JAISWAL

3. KUMARI KHUSHBOO

4. JYOTI KUMARI

5. KIRAN KUMARI SHARMA


WHAT IS A DIRECTOR
The Companies Act gives no precise definition of the term
‘director’, merely stating in section 1(1) that a director
includes ‘any person occupying the position of director or
alternate director of a company, by whatever name he may
be designated.
The term ‘board’ is the collective term used to designate the
directors when they act together as a group
DUTIES OF DIRECTOR
The duties of director are multifarious and they vary from company to company
depending upon the type and size of its activities.

The duties of director may be divided under two heads:

1. Statutory duties :- these duties are imposed by the company act.


Important among them are as follow:-

a) Duty to attend board meetings.


b) Duty not to contract without board`s consent
c) Duty to disclose interest (section 299-300)
d) To disclose receipt of compensation from transferee of share

2. Fiduciary and general duties :-

a) Duty not to be negligent and not to commit or let others to commit


tortuous acts
CONTINUATION

b) Duty no to exceed powers

c) Duty to act in the best interest of the company and its stakeholder

d) Duty not to exercise power for a collateral purpose


TYPES OF DIRECTOR
 Inside director

 Outside director

 Professional director

 Nominee director

 Executive director

 Independent director

 Interested director

 Government director

 Whole time director


QUALIFICATION OF DIRECTOR
No education or other qualification are required in order to become a
director of a company, whether public or private, also Company act 1956
does not prescribe any requirement as age limits for becoming a director,
but it prescribe some disqualification for director for all companies like

 Person who has been found to be unsound mind by court or competent


authority .
 Person who is un-discharged insolvent .
 A person who did not pay call on share and 6 month elapsed from the
last day .
 A person who is convicted by court of any offence and sentenced to
imprisonment for 6 month or more .
 A person who is disqualify by court .
QUALIFICATION SHARES

There is no statuary requirement that director must hold qualification shares in the
company in which he is director, unless the article provide otherwise. However, the
article usually provide for a share qualification

If the articles of a company provide for share qualification, Section 270 lays down
that :_

 Each director must obtain his qualification share within two months after his
appointment as director.

Any provision in the articles shall be void if director does not obtain the
qualification share within two month of his appointment .

The nominal value of the qualification shares shall not exceed Rs 5000.
Number of director

 According to section 252 of the companies act 1956, every public company
shall have minimum three directors, every private company shall have at least
two directors.

 Company may decide minimum ( if it more than by statuary limit) and


maximum numbers of directors through article of association

 According to the section 258, Company in general meeting may by ordinary


resolution, increase or decrease the number of director within the limits provided
by the articles.

 Increase in the number of directors if number increased more than 12 require


central government approval in some circumstances.
Restriction on number of directorships

Section 275 of the Companies Act prohibits the


appointment of a person holding office of a
director at the same time in more than fifteen
companies.
Appointment of directors

Director can be appointed in the following ways :


 By subscribers to the memorandum section (254) ( first director )

 By members in general meeting section (255 ,256, 257, 265)

 By boards of directors section ( 260,262,313)

 Additional director
 filling up casual vacancies
 Alternate director

 By central government section (408 & 409)

 By third parties if the articles provide.

 By small shareholders if the article provide.


Various liabilities of director

Under the companies act 1956, the liabilities of company directors are numerous.
Their civil and criminal liabilities may be grouped under certain heads for convenience
and discussion. They are :

• Liability to outsiders
• Liability to shareholders
• Liability for statutory defaults and violation
• Liability to company
Conclusion
The success of every company depends ultimately on
the caliber of its directors and the effectiveness of its
board.

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