DIRECTORS

A PERSON WHO TAKES OR IS CHARGED WITH RESPONSIBILITY OF DIRECTING,

CONDUCTING AND CONTROLLING THE AFFAIRS OF THE COMPANY.
SEC 2(13) OF THE COMPANIES ACT OF 1956 defines a Director as “any person
occupying the position of a director, by whatever name called”
APPOINTMENT OF THE DIRECTORS:
ONLY individuals are appointed and not any organisation, firm etc.,
- Promoters
- Subscribers to the MOA
- Company’s general meetings
- B.O.D.
- Third parties – Government bodies, employees, financial institutions
- Central Government

QUALIFICATIONS: Provisions as per sec 270

- Minimum no. of shares to be held
- Should have some stake
- Face value of the qualification shares of a director is fixed by the AOA must
not exceed Rs.5000/-
- Qualification shares must be acquired within two months of the
appointment as a director, if the company is already existing
- Newly formed company – qualification shares should be purchased in
advance
- No. of shares taken by the director should be disclosed in the prospectus.
- File the details of his holdings with the registrar of companies.

DISQUALIFICATION: Sec 164 of the Companies Act of 2013 (REMOVAL)

- Declare Unsound mind by the court
 - Insolvent
- Applied for insolvency and judgement is pending
- Convicted by the court for any offence and imprisoned
- Failed to pay the calls on his shares
- Court has disqualified a person to become a director

DIRECTORS CAN BE REMOVED BY THE FOLLOWING BODIES –

- SHAREHOLDERS
- CENTRAL GOVERNMENT
- COMPANY LAW BOARD
 LEGAL POSITIONS OF DIRECTORS:

1. DIRECTORS AS AGENTS –

- Directors act for and on behalf of the company

- They have a relationship of Principal and Agent
- Need to conduct business with reasonable care and
diligence
- Act within the scope of his/her authority – company is not
liable if they act beyond their powers or ultra vires the
powers
- Act in the representative capacity and not in their personal
capacity
- They cannot make secret profits on contracts
- They need to exercise the powers given by the MOA.
- If they go beyond the powers of AOA then it may be
ratified or justified by the company.
2. DIRECTORS AS TRUSTEES –
Means a person who holds some property in trust and
manages it for the benefit of another person.
- They have a fiduciary relationship to the company
- Hold and use property in the true interest of the company
- Required to take reasonable care to protect the property
- Required to act in good faith in matters related to allotment
of shares and debentures, transfers, transmissions,
forfeitures etc
- No making secret profits

3. DIRECTORS AS MANAGING PARTNERS:

- Manage day to day management of the firm
- Act like partners of the firm as they also own shares and
are shareholders

DIRECTORS CAN BE CONSIDERED AS OFFICERS OF THE

COMPANY AS PER SECTION 2(30) OF THE COMPANIES
ACT.

DIRECTORS ARE DEEMED TO BE OFFICERS OF THE COMPANY

AND ARE LIABLE AS OFFICERS TO CERTAIN PENALTIES, IF
 THE PROVISION OF THE COMPANIES ACT ARE NOT
COMPILED WITH.

DUTIES OF THE DIRECTORS

TWO CATEGORIES OF DUTIES
1. STATUTORY DUTIES
2. GENERAL DUTIES

STATUTORY DUTIES
- DETERMINE THE MINIMUM SUBSCRIPTION
- HOLD STATUTORY MEETINGS
- PREPARE AND FILE STATUTORY REPORT WITH THE REGISTRAR OF CO’S
- CALL FOR ANNUAL GENERAL MEETING
- CONVENE E.G.M. EXTRAORDINARY GENERAL MEETING
- TO APPROVE THE BALANCE SHEET AND P & L ACCOUNT
- KEEP READY THE AUDITORS AND DIRECTORS REPORT FOR AGM’s
- TO PAY DIVIDENDS IF DECLARED
- PURCHASING AND PAYING FOR QUALIFICATION SHARES
- MAINTAIN THE REGISTER OF MEMBERS
- SHARE WARRANTS AND SHARE CERTIFICATES ARE TO BE DISPATCHED
- DEBENTURE CERTIFICATES TO BE DISPATCHED
- DECLARATION OF INSOLVENCY IN CASE OF VOLUNTARY WINDING UP
- SUBMIT STATEMENT OF AFFAIRS DURING WINDING UP OF THE COMPANY
- ACCOUNTS AND BOOKS TO BE KEPT OPEN FOR INSPECTION
- TO SIGN PROSPECTUS BEFORE IT IS FILED WITH REGISTRAR
GENERAL DUTIES:

- To manage the day-to-day affairs of the company

- Good faith
- Responsibility
- To be unbiased towards the company’s management and
shareholders
- To avoid conflict of interest
- Not to work for personal benefit
- Not to make secret profits
- Not to neglect their statutory duties
- Not to go ultra vires the company’s MOA & AOA
TENURE OF DIRECTORS:

Sec 149(10) (11)

An independent director can hold the office up to three

consecutive years in all types of companies.

He/She can be reappointed after the term.

NUMBER OF DIRECTORSHIP –

Minimum - SEC 149(1) (a)

- Public Companies – min of 3 directors

- Private companies – min of 2 directors
- OPC – one director
Maximum: Sec 149(1) (b)
Public – 15 directors
Private - 15 directors
Types of Directors in a
Company
Residential Director

As per the law, every company needs to appoint a director who has been in
India and stayed for not less than 182 days in a previous calendar year.

Independent Director

Independent directors are non-executive directors of a company and help the

company to improve corporate credibility and enhance the governance
standards. In other words, an independent director is a non-executive director
without a relationship with a company which might influence the independence
of his judgment.

The tenure of the Independent directors the shall be up to 5 consecutive years;

however, they shall be entitled to reappointment by passing a special resolution
with the disclosure in the Board’s report.

Small Shareholders Directors

A listed company, could upon the notice of minimum 1000 small shareholders or
10% of the total number of the small shareholder, whichever is lower, shall have
a director which would be elected by small shareholders.
Women Director

A company, whether be it a private company or a public company, would be

required to appoint minimum one woman director in case it satisfies any of
the following criteria:

• The company is a listed company and its securities are listed on the
stock exchange.

• The paid-up capital of such company is Rs.100 crore or more with a

turnover of Rs.300 crores or more.

Additional Director

A person could be appointed as an additional director and can occupy his post
until next Annual General Meeting. In absence of the AGM, such term would
conclude on the date on which such AGM should have been held.

Alternate Director

Alternate director refers to a personnel appointed by the Board, to fill in for a

director who might be absent from the country, for more than 3 months.

Nominee Directors

Nominee directors could be appointed by a specific class of shareholders, banks

or lending financial institutions, third parties through contracts, or by Union
Government in case of oppression or mismanagement.
ASSIGNMENT TO BE SUBMITTED BY 26TH APRIL, 2021

APPOINTMENT

QUALIFICATION (as per law)

DUTIES AND LIABILITIES

OF – C.E.O and CFO

zeena_flavia@staloysius.edu.in
 COMPANY SECRETARY

As per Section 2 sub section 24 of Companies Act, 2013

“Company Secretary” or ― “secretary” means a company

secretary as defined in clause (c) of sub-section (1) of section 2 of
the Company Secretaries Act, 1980 who is appointed by a
company to perform the functions of a Company Secretary under
this Act;

As per Company Secretary Act, “Company Secretary” means a

person who is a member of the Institute of Company Secretary of
INDIA.

APPOINTMENT OF COMPANY SECRETARY

APPOINTMENT OF COMPANY SECRETARY AS PER COMPANIES

ACT, 2013:

Requirement to appoint Company Secretary in Private Limited

Company govern by the Provision of Rule- 8A and in Public /
Listed Company by the provisions of Rule-8 of The Companies
“Appointment and Remuneration of Managerial Personnel”
Chapter XIII under Section-203 of Companies Act, 2013.
Process to Appoint as Company Secretary:

I. Call Board Meeting: As per Section- 203(2) Pass a Board

Resolution for Appointment of Company Secretary. Board
Resolution should contain the following

• Terms and Condition of Appointment.

• Remuneration

• Membership No.

II. Consent to act as Company Secretary: Receive consent from

Company Secretary to act as Company Secretary.

III. Consent to act As Company’s KMP (KEY MANAGERIAL

PERSONNEL) : Receive consent from Company Secretary to act as
Company Secretary.

QUALIFICATIONS AS PER LAW:

1. Statutory qualification:

a) As per the latest Companies Appointment and qualifications of

secretary (Amendment) rules of 2002 say that every company
having a paid up share capital of Rs. 2 crores or more should have
a whole-time company secretary.
b) In case company has less than Rs 2 crores, one or more of the
following qualifications are required for appointment –

- Membership of the Institute of Company Secretaries of India

- Pass in intermediate examination conducted by Institute of

Company Secretaries of India

- Degree in law awarded by any university of India

- Membership of ICWA (Cost & Works)

- PG Diplomas in Company Secretaryship from any recognised

institutions of India

2. Other qualifications:

- General education

- Command over languages

- Knowledge of office administration

- Knowledge of general procedure of meetings

- Knowledge of accounts and software related to accounts

- Banking, finance and insurance

- Knowledge of company law

- Various laws connected to staff of the company

- Knowledge of taxation laws

- Knowledge of mercantile law / business law

- A good personality