COMPANY MANAGEMENT

WHO IS A DIRECTOR?

• A DIRECTOR IS AN INDIVIDUAL WHO DIRECTS, CONTROLS AND

MANAGES THE AFFAIRS OF THE COMPANY.

• MUST PERFORM DUTIES AND FUNCTIONS IN ACCORDANCE WITH

THE PROVISIONS OF THE COMPANIES ACT 2013

• EVERY COMPANY CONSISTS OF BOARD OF DIRECTORS

APPOINTMENT OF DIRECTOR
1. APPOINTMENT OF FIRST DIRECTORS
 Named in the Articles of Association.
 If not mentioned in the A.O.A, the subscribers to the M.O.A shall be deemed to
be the FIRST DIRECTORS until the directors are duly appointed

2. APPOINTMENT BY THE COMPANY

 Until the first AGM- First directors
 Further the shareholders appoint the directors on a regular basis
 2/3 – ROTATIONAL/RETIRING DIRECTOR. Remaining are NON ROTATIONAL.
 The retiring director can be reappointed.
3. APPOINTMENT BY B.O.D
THE Board is empowered to appoint directors in 3 categories
A. ADDITIONAL DIRECTORS : By passing special resolution
B. CASUAL DIRECTOR
C. ALTERNATE DIRECTORS

4. APPOINTMENT BY THE CENTRAL GOVERNMENT

 On an order by NCLT
 To prevent the affairs of the company which are
oppressive to any member,
against the public or company’s interest
5. APPOINTMENT BY THIRD PARTY
 The A.O.A or M.O.A empowers the third parties to appoint a DIRECTOR as their
representative.
 Debenture holders, Banks, Financial institutions, Government
 “Nominee directors”
 Cannot exceed 1/3. Not subject to retirement.

6. APPOINTMENT BY PROPORTIONAL REPRESENTATION

 The ACT enables the minority shareholder to appoint a DIRECTOR
 Single transferable vote or cumulative voting
 Made once in 3 years
Managing director
 A person appointed by the Board on their behalf as a whole time director.
 Subject to control and direction of the Board.
 A company having paid up share capital of more than Rs. 5crore must have a MD
 MODES OF APPOINTMENT:
-- agreement with the company
-- resolution passed by the company in the GM, OR by B.O.D
-- M.O.A
 Application to the Central Govt
 If appointment is made without the approval: Fine must be paid by the company and
every officer. The MD must refund his remuneration.
 Max no. of managing directorship is 2
 Term of office- 5 years