1.

Director
1.1 Appointment and Qualifications:
- Directors are appointed to manage the company’s operations
- There are no specific professional qualifications required unless specified in the Articles of
Association (AOA) of the company

1.2 Types of Directors:

- Executive Director: Engages in day-to-day management.
- Non-Executive Director: Not involved in daily operations but part of the board.
- Independent Director: Not related to the company; provides unbiased judgment.
- Nominee Director: Appointed by financial institutions to represent their interests

1.3 Duties:
- Act in accordance with the company’s AOA and in good faith to promote the company’s
objectives.
- Exercise duties with due care, skill, and diligence, avoiding conflicts of interest.
- Ensure confidentiality of sensitive information and proper approval of related party transactions
1.4 Liabilities and Penalties:
- Directors can be held jointly or individually liable for acts prejudicial to the company’s
interests.
- Penalties for violations can range from fines to imprisonment, particularly for fraud-related
offenses

2. Auditor
2.1 Role and Responsibilities:
- Auditors examine and verify the accuracy of a company’s financial statements and ensure
compliance with statutory requirements.
- They must maintain independence and cannot hold financial interests in the audited company
2.2 Appointment and Removal:
- Appointed by shareholders in the AGM for a term of five years.
- Can be removed before the term ends by a special resolution of the shareholders and prior
approval from the central government
2.3 Duties:
- Conduct thorough audits, report on financial statements’ accuracy, and ensure that the company
complies with financial regulations

3.Share Capital

3.1 Types of Share Capital:

- Authorized Capital:
Maximum amount of share capital that a company can issue as specified in its MOA.
- Issued Capital: Portion of authorized capital actually offered to investors.
- Subscribed Capital: Part of issued capital that investors have agreed to buy.
- Paid-up Capital: Amount of money received by the company from shareholders in exchange
for shares .

3.2 Classes of Shares:

- Equity Shares: Carry voting rights and dividends based on profit.
- Preference Shares: Preferential rights over dividends and asset distribution upon liquidation

4.Loan Capital

4.1 Definition and Types:

- Funds borrowed by the company, typically through debentures or bonds, which must be repaid
with interest.
- Debentures: Long-term securities yielding a fixed rate of interest.
- Bonds: Debt securities issued to investors with a promise to pay back with interest
4.2 Characteristics:
- Does not dilute ownership.
- Interest payments are tax-deductible expenses for the company

5.Fixed and Floating Charges

5.1 Fixed Charges:
- Security interests on specific assets that cannot be sold without the lender’s permission.
- Typically attached to fixed assets like land and buildings
5.2 Floating Charges:
- Cover a class of assets that can change over time, such as inventory.
- Become fixed charges upon certain triggering events, like default or insolvency

6.Automatic Crystallization

6.1 Definition:
- The automatic conversion of a floating charge into a fixed charge upon the occurrence of
specified events, such as default or insolvency.
- Ensures the lender’s interest in the company’s assets becomes specific and enforceable

7.Meeting
7.1 Types of Meetings:

- Annual General Meeting (AGM): Held yearly to discuss company performance, elect
directors, and approve financial statements.
- Extraordinary General Meeting (EGM): Called to discuss urgent matters requiring
shareholder approval.
- Board Meetings: Regular meetings of the board of directors to discuss and decide on company
management (

7.2 Procedures:
- Proper notice must be given to all entitled participants.
- Quorum requirements must be met for the meeting to be valid.
- Resolutions are passed through voting, with minutes recorded for official purposes

8.Winding Up
8.1 Types:
- Voluntary Winding Up: Initiated by the shareholders or creditors when the company is
solvent.
- Compulsory Winding Up: Ordered by a court, typically when the company is insolvent and
unable to pay its debts
8.2 Process:
- Involves selling off company assets to pay off creditors.
- Remaining assets, if any, are distributed among shareholders according to their shareholding

9.Promoters
9.1 Role and Responsibilities:
- Promoters undertake the initial steps to form a company, including preparing incorporation
documents and raising initial capital.
- Responsible for the company’s formation, ensuring compliance with legal requirements, and
often hold the initial board positions
9.2 Duties:
- Must disclose any personal interest in transactions with the company.
- Cannot make secret profits and must act in the best interest of the company during its formation

10.Company Secretary
10.1 Role and Functions:
- Ensures compliance with statutory and regulatory requirements.
- Maintains company records, manages shareholder communication, and advises the board on
governance matters