TYPES OF DIRECTORS

AYAN CHOKSI
RAKIB MERCHANT
MAHESH SINDHA
SANDEEP PANDEY
 DIRECTORS

• The company carries on its business through individuals called directors.

• Collectively they are called Board of Directors

• No body corporate, association or firm can be appointed as a director of a

company, and only an individual can be appointed

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 DIRECTORS
• ‘Director’ includes any person
occupying the position of director,

 A person having control over the

direction, conduct, management
of the affairs of a company. Any
person in accordance with whose
directions or instructions, the
Board of a company is accustomed
to act, is deemed to be a director
of the company.

 Only individuals can be directors

 CONSTITUTION
 Every Public Company must have at least 3 directors
 A Public Company having A paid up capital of Rs. 5 crore or more and One
thousand or more shareholders Can elect a director by small shareholders.
 A private company must have at least 2 directors
 Subscribers of the memorandum who are individuals, are deemed to be the
directors of the company, until the directors are duly appointed in accordance
with the Act.
 Directors are appointed in general meeting, in board meeting, by central
government, by proportional representation or a person can stand for
directorship, if eligible.

(Continued…) 4
(…Continued) CONSTITUTION
 A company can have a maximum number of 12 directors and to
increase this number, the approval of Central Government is required.

 The board of directors can appoint Additional Directors, by passing a

resolution, if such a power exists in the articles.

 If any vacancy arises in office of any director then subject to the articles, the
board of directors can fill the vacancy at a meeting of the board.

 One single resolution can appoint one director only and two or more.

 A company, at a general meeting may, by ordinary resolution, increase or

reduce the number of its directors within the limits fixed in that behalf by its
articles.

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APPOINTMENT OF DIRECTOR

 Any person can be eligible for appointment to the Office

Of Director at any Annual General Meeting, if

 He himself or some member intending to propose that

person as a director.
Gives a sign notice in writing to company.
Signifying that persons for the office of director
Along with a deposit of Rs. 500/- which is refundable subject
to appointment as a director
 REMOVAL OF DIRECTORS
Removal Of Directors is conferred upon Shareholders,
Central Government and Company Law Board

 A company may, by ordinary resolution, remove a director (not being a

director appointed by the Central Government in pursuance of section
408) before the expiry of his period of office. This provision shall not apply
where the company has availed itself of the option given to it of
proportional representation on the Board of Directors to appoint not less
than two-thirds of the total number of directors according to the principle
of proportional representation.
 Special notice shall be required of any resolution to remove a director, or
to appoint somebody instead of a director so removed at the meeting at
which he is removed.
 VACATION OF OFFICE BY DIRECTORS
 The directorship of a director automatically ceases if,

He fails to obtain qualification shares

He fails to pay any call in respect of shares

He absents himself from 3 consecutive meetings of the board of

directors, or from all meetings of the board for a continuous
period of 3 months, whichever is longer, without obtaining leave
of absence from the board
He is removed by the shareholders by resolution passed in a
general meeting
 A company can remove a director even before the expiry of his period of
office
DISQUALIFICATION OF DIRECTORS
A person shall not be capable of being appointed director of a
company, if
 he has been found to be of unsound mind by a Court of competent
jurisdiction and the finding is in force
 he is an undercharged insolvent
 he has applied to be adjudicated as an insolvent and his application
is pending
 he has been convicted by a Court of any offence involving moral
turpitude and sentenced in respect thereof to imprisonment for not
less than six months, and a period of five years has not elapsed
from the date of expiry of the sentence
 ADDITIONAL DIRECTORS
 The Board of directors may appoint additional directors if such
power is conferred on it by the articles of the company. Such
additional directors shall hold office only up to the date of the next
annual general meeting of the company
 The Board of directors of a company may, if so authorized by its
articles or by a resolution passed by the company in general
meeting, appoint an alternate director to act for a director during
his absence for a period of not less than three months from the
State in which meetings of the Board are ordinarily held
 REMUNERATION OF DIRECTORS
DIRECTORS REMUNERATION
 The overall maximum  Not more than 11% of the net
remuneration payable to directors profits of the company for that
and its managers in one financial year financial year

 If a company has only one director  Not more than 5% of the net
profits

 If a company has more than one  Not more than 10% of the net
director profits for all of them together

 The director is not a whole time  Not more than 1% of the net
director profits
 LOANS TO DIRECTORS

A company provides loan to its director (for a guarantee or security) or the

related parties, with proper approval from Central Government. This is to
ensure that the Board Of Directors of a public company does not misuse
the funds of the company for the benefit of its directors.

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 SPECIAL AUTHORITIES
Directors can exercise certain powers only at the meetings of the board
related to some significant matters which need deliberations
and discussion, They are,
 Make Calls on shareholders in respect of money unpaid on their
shares
 Issue debentures
 Borrow moneys otherwise than on debentures
 Invest the funds of the company
 Make loans
Thank You!