 Sec 2(13) defines the term director as including

any person occupying the position of a director

by whatever name called .
 A person is said to be occupying the position of

a director if he has been changed ,with the

responsibility of managing the affairs of the
company and as such performs the duties and
functions specified at random in the companies
act.
First Directors-Persons named in the articles of
association ,if no persons is named in articles the
person who signed in the memorandum of association
can become the first directors
Appointment of company-The normal mode of
appointing directors is election by the members
Appointment of directors.
1.Additional director- appointed by the directors shall hold office
only up to the date of the next annual general meeting .
2.In a casual vacancy- may be filled by the board of directors by
nomination.
3.An alternate director-can be appointed by the board of it so
authorized by the articles and a resolution passed by the
company in the general meeting.
Appointment by third parties-appointed by debenture
holders and other creditors
Appointment by central government- the central
government can appoint such number of directors on
the board as the tribunal may by order in writing
The office of a director shall become vacant if-
1.He fails to obtain within 2 months of his appointment or at any
time thereafter ceases to hold the share qualification.
2.He is adjusted to be of unsound mind.
3.He is adjudged and insolvent.
4.He is convicted by court.
5.He fails to pay any call in respect of shares of the company.
6.He absents himself from 3 consecutive meetings.
7.He fails to make disclosures to the board of directors with regard
to contracts.
8.He is convicted by offence in connection with promotion ,
formation or management of company or found guilty of fraud.
9.He is removed before the expiry of his period of office by
ordinary resolution
 By Shareholders.
The shareholders of the company may remove a director before
the expiry of his period of office by passing an ordinary resolution
in a general meeting.
 By Central Government.
Remove any director from the office on the recommendation of
the tribunal if found guilty of:
 Fraud , Misfeasance ,persistent negligence , breach of trust.
 Not conducting and managing the business of the company.
 Causing injury or damage to the interest of trade , industry, or
business.
 To defraud the creditors, members or any other person.
 By Tribunal.
On an application to the tribunal for prevention of oppression or
mismanagement the tribunal may terminate set aside or modify
any agreement between the company and the director.
 Powers exercisable at board’s meeting only.
power to fill casual vacancies in the board.
Power to make calls on shares
Power to issue debentures.
Power to borrow money otherwise than on debentures.
Power to invest the funds of the company.
Power to make loans.
Power to receive notice of disclosure of his interest by a director
in a contract with the company.
Power to appoint a person as managing director or manager
Power to invest in the shares and debentures.
 Powers exercisable with consent of general
meeting.
 The power to sell , lease or otherwise dispose of the
whole or substantially the whole of the undertaking or any of the
undertakings of the company.
 The power to remit or give time for the repayment of any debt
due by a director
 The power to borrow money
 The power to contribute to charitable and other funds not directly
relating to business of the company or welfare of the employees.
 The power to appoint a sole selling agent for a term exceeding 5
years at a time
 The power to invest in shares of any other body corporate
 Power exercisable under article.
 The power to allot shares

 The power to make calls on shares.

 The power to forfeit the shares.

 Power to approve transfer and transmission of shares.

 Power to convene general meetings.

 Power to capitalize profits.

 Power to create reserves out of profits.

 Power to declare dividends.

 Power exercisable with consent of central
government.
 An amendment to any provision regarding
appointment or reappointment of a managing or
whole time director.
 Appointment or reappointment of a managing or

whole time director of a public company.

 The appointment of sole selling agent

 The making of loans to director.

 Duties under the company Act,1956.
 To see that the application money received in respect of the
shares.
 To convene and hold it within statutory time limit.
 To forward a statutory report to the members.
 To convene an annual general meeting.
 To produce annual accounts and balance sheet at the
meeting.
 To present director’s report at the meeting .
 To convene extra ordinary meeting
 To disclose the interest in contracts entered into
 To make declaration of solvency.
 To produce full statement of the position of the company
affairs.
 To appoint one of the members of the board to preside
over the meeting of creditors
 Duties under common law.
 Fiduciary duties.

 Directors must exercise their powers honestly.

 must work for the best interest of the company.
 should not make any secret profits.
 judgment should not be biased

 Duties of care ,skill and diligence.

Duties with reasonable care and exercise such degree of

skill and diligence is reasonably expected of persons of
their knowledge and status
 Liability to third parties.
 issue prospectus which does not contain material misrepresentations.
 Failure to repay application money.
 Irregular allotment of shares.
 Name is not mentioned in negotiable instrument.
Liability to the company.
 Ultra vires act.
 Negligence.
 Breach of trust.
 Misfeasance.

 Liability for breach of statutory duties.

Maintenance of proper accounts.
filing of returns.

 Liability for act of his co-directors.

The directors is not liable for the acts of his co-directors
provided he has no knowledge and he is not a party.