INSTITUTE: University

School of Business
DEPARTMENT: BBA
Bachelor of Business Administration
Subject Name: Commercial & Company Law
Code: BAT-259

DISCOVER . LEARN .
EMPOWER
 Commercial
& Company
Law
Course Outcome
CO Number Title Level
CO1 To Remember
understand  
Indian
Contract Act
CO2 To Understand
understand  
the concept
of Law of
Contract
CO3 To Understand
understand
Negotiable
Instruments.
CO4 To Understand
understand  
the https://www.google.com/search?q=commercial+
Company
Law %26+Company+law&source=lnms&tbm=isch&sa=
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Directors of a Company (Sec-
149)
• Directors refer to the part of the collective body
known as the Board of Directors.
• Responsible for:
i. controlling,
ii. managing and
iii. directing the affairs of a company
• Director plays several roles in a company, as an
agent, as an employee, as an officer and as a
trustee of the company.
Minimum and Maximum number of directors in a company

• The law requires that every company must have

i. at least 3 directors in case of public limited
companies,
ii. minimum 2 directors in case of private limited
companies and
iii. a minimum 1 director in case of one-person
companies.
iv. A company can have a maximum of 15 directors.
v. The company could appoint more directors bypassing
the special resolution in its general meeting.
Appointment of Directors
• Appointment of First Directors (Sec. 152): First directors
mean the director of the company who assumes office from the date of incorporation of
the company. The first directors of a company may be named in its articles of association
and if it is not mentioned, then the subscribers of the memorandum of association who
are individual, shall be deemed to be the first directors of the company, until the directors
are not appointed in accordance with Section 152.

• Appointment of Directors by Members in the

General Meeting (Sec. 152(2): the subsequent directors are
appointed by the company in the general meeting. Sec. 152(2) provides that not less
than 2/3 of the total number of directors of a public company, or of a private
company which is subsidiary of a public company must be appointed by the
company in general meeting. These directors must be subject to retirement by
rotation. The remaining directors of such a company and a purely private company
are appointed by the company in general meeting.
• Appointment by Board of Directors: The directors are
appointed in the general meeting by the members. But, the Board of Directors may also
appoint the directors, in the following way:

a. Additional Directors: Section 161, of the Act, lays down that the

Board may appoint additional directors if the article of association of a company
empower the Board of Directors to do so. 

b. Casual Vacancies: Section 161 empowers the Board of Directors to

appoint the directors in the casual vacancy which may occur due to any reasons like,
death, resignation, insanity, insolvency etc of the directors. Such casual vacancy may be
filled according to the regulations and procedure prescribed by the articles of
association.

c. Alternate Directors: The Board Meeting may be held at a time when a

director is, absent for a period of more than three months from the state and in such a
situation, an ‘alternate director’ is appointed. The Board of Directors can appoint the
additional director in the absence of a director if so authorized by articles or by a
resolution passed by the company in general meeting.
• Appointment of Directors by Central
Government: At least 100 members of the company or the members of
the company who hold at least one-tenth of the total voting power, approach the
Central Government for appointing a director to safeguard the interest of the
company or its members or the public or to curb the oppressive and
mismanagement of company’s affairs.
• The term of appointment of the directors by the Central Government should not
exceed 3 years and he may be removed by the Central Government for appointing
another person to hold the office.
•  Appointment of Directors by Third-Parties if the
Article provides (Sec. 152): A company may have ‘nominee
directors’ which is permissible in a company if the articles of association gives
power to such third parties to appoint their nominee on company’s board.
Here the third party may be debenture holders, financial corporation, banking
companies who have advanced loan to the company to safeguard their
interests that the money is only used for the purpose for which it was
borrowed.
Removal of Director
• A director of a company can be removed by
(a) Shareholders (Sec. 169)
(b) The Tribunal (Sec. 242)
Removal by shareholder:
• Section 169 empowers the company to remove a director by
ordinary resolution before the expiry of his period of office
except in the following cases:
(1) A director appointed by the tribunal under sec. 242;
(2) A nominee director of a public financial institution which is
by its charter empowered to nominate a person as a director
or to remove him notwithstanding any power contained in
any other act;
(3) Director appointed in accordance with the principal of
proportional representation, under section 163. This is to
ensure that the directors appointed by the minority are not
removed by a bare majority.
Removal by the Tribunal
• On an application to the Tribunal for prevention of
oppression and mismanagement, the tribunal may
terminate or set aside or modify any agreement
between the company and the managing director,
or any other director or manager. On such
termination, the director cannot serve the company
in a managerial capacity for a period of five years
from the date of the order of termination, without
the permission of the tribunal. The director on
removal cannot sue the company for damages or
compensation for loss of office (Sec. 243).
ASSESSMENT PATTERN

• Understanding of the subject will be assessed through question and answer technique in the
class
• 2 Mid semester tests will be conducted
• Students will appear for online quiz at the end of the semester
• Surprise test to be taken during the semester
• Regular assignments and case study discussion will be done to bring more clarity on the
subject

11
APPLICATIONS
• Concept of Indian Contract Act

• Concept and importance Law of contract

• Discharge and Breach of contract

• Agent and various types of Agent.

12
References
• Mercantile Law by Garg, Chawla, Sareen, .
• http://www.legalserviceindia.com/laws/contracts.htm
• Elements of Mercantile Law by Kapoor N.D,

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THANK YOU