DIRECTORS © Any person occupying position of directors © Directors managing affairs of company © Directors takes part in below activities @. Planning DB. Conducting business € Controlling company affairs © Director act’s as agents of company * Director powers and duties explained in memorandum and articles ILS powers of directors: I*Power in board meeting only a. To fill casual vacancies in the board members b. Power to make calls on equity shares c. Power to issue debentures and bonds d. Borrow money other than debentures e. Invest the funds of the company in other shares f. Power to make loans to any members g. Giving consent to any new contract made h. Express his interest to act as director to registrar i. Invest in other company shares and bonds 11>power in general Mesting: Power sell (or) lease company properties To remit (or) give time to others for paying dues To contribute for charitable funds (i.e) 5% of net profit To appoint selling agent for 5 years time Power to invest in share & debt markets PRP ep asm’~Power given by articles: Power to allot shares to public Power to make calls on shares Power to for felt shares unpaid Approve transfer of shares to stock Power to convene annual general meetings Power to capitalize profits in business Power to create reserves from profit Power to declare dividends to share holders Fer Pee ep IV=Power given by central government: a. appointment of directors to subsidiary company b. appointment of directors for increase profit €. appointment of selling agent to the company d. making loan to director from company’s fund e. giving guarantee to loans (or) advances f. entering into contract that exceeds 1 core value g. appointing staff in carrying company business = II|—Duties of directors There are 2 types of duties 1. Statutory duties 2. General duties 2/5Duties of directors 7 L. Statutory duties General duties File return on allotment L—», duty of good faith Not issue irredeemable «=> duty of care Shares after 10 years => Alters board meeting To disclose interest Disclose receipt (or) «—> duty not to delegate Transfer of property Disclose compensation to shares transferring agents I. statutory duties: 1) To file return of allotments > Director has file return on allotment of shares > After 30 days of non allotment has repay the amount > If failed to repay amount Rs 500 fine every day 2) Not issue irredeemable preference shares © Director should not issue irredeemable preference shares after 10 years © If failed to follow Rs 1000 fine 3) To disclose interest: “ The director must disclose his interest + To act as directs of company + Because his liability and responsibility is more 3/54) To disclose of compensation to share transfer agent v The directors should disclose ¥ The compensation details to selling agents ¥ The percentage of share commission and fees 5) To disclose compensation: V The director should disclose ¥ The compensation detail in meeting ¥ The receipt and transfer of company property 1) Duty of good faith: Y The director must act in his best interest ¥ The interest is present and futures gain of company ¥ He should not make secret profit ¥ Also not exploit company properties 2) Duty of care: Directors should carry their duties with a. Full care and his best interest b. Utilize full skills and capacity c. Make use of their knowledge and experience 3) Duty to attend board meetings: e The directors gets power In meetings © Hence directors should not avoid meetings If consequent of 3 meetings avoided The director power will be vacant 4) Duty not to delegate: > Director is an agent act for company > Adelegate cannot delegate further > Director must perform functions himself personally > Director may delegate his works in blow cases a) Where permitted by companies act-1956 b) Some additional duties approved by members 4/5LIABILITIES OF DIRECTOR: THERE ARE 4 LIABILITIES OF DIRECTORS 1. Liability to third party a) Issue of prospectus to public for subscriptions b) Repay money if minimum subscription is not claimed ¢) Allotting shares to subscribers as per request 2. Liability to company >> If director acts as dishonest with company >> If director has lack of interest in his duty >> In case of transferring unused shares >> Misuse of interest free loan given by company 3. Liability if breach statutory duties > Maintenance of proper accounts > Filing returns and profit and gains > Ifany penalty causes director is liable 4. Liability for his co director activities + Director is liable for penalty “+ If event happened with his knowledge « If he permit co director to do such activities 5/5