DIRECTORS

Sec. 2 (13) - includes any person

occupying the position of director by
whatever name called

• Only individuals may be directors

• To qualify as a Director –
 Name/Designation not important
 Functions/duties discharged is
relevant

1
Types of Rotational Special
Perm
Directors anent

Authority AOA Shareholders NCLT/

for apptt. CG
Max. Nos. 1/3rd 2/3rd As per
Retiremnt Not Each year to direction
retire – 1/3rd
Appl. of 2/3rd;
longest in
office to retire
first; election
at AGM 2
 APPOINTMENT OF RETIRING
DIRECTORS IN BETWEEN AGMs

Last BOD Mtg BOD Mtg Next Next

AGM AGM AGM

Additional
Director
Casual
Director
Alternate Director
[apptt by original Director]
3
 MANAGING DIRECTOR
Definition - A director who is entrusted
with substantial powers of Board
Method of Appointment
• By Shareholders resolution
o By virtue of MOA
o By virtue of agreement (contract)
o By Board Resolution
 Companies with PUC > Rs. 5 Cr.
 Conditions & Remuneration – Sch XIII
4
 Some Important provisions

Public Co may elect Small

Shareholder Director if
1) PUC > Rs. 5 Cr.
2) More than 1,000 shareholders holding
shares of more than Rs. 25,000 (FV)
Consent to act as Director [Public Co.]
before appointment – with the
Company
after appointment – within 30 days to
5
DISQUALIFICATION
• Incompetent to contract
• Convicted of moral turpitude,
sentenced upto 5 years
• Not paid call money and 6 months
have lapsed
• Disqualified u/s 274(1) (g)
VACATION
• Becomes incompetent to contract
• Qualification Shares not taken
• Absents 3 consecutive BM 6