DIRECTOR

Director

Definition : A director is a person from a group of managers who leads or supervises a particular area of a company, program, or project.

Meaning : An appointed or elected member of the board of directors of a company who, with other directors, has the responsibility for determining and implementing the company's policy. According to section 2(30), provides that no body corporate association or a firm can be appointed as director of the company. Only an individual can be appointed as a director. A company director does not have to be a stockholder or an employee of the firm

Qualification and disqualification of a Director

QualificationA director must hold a share in the company.Each director must take his qualification share in within 2 months.DisqualificationAn insolvent person can not become a director.An unsound mind person can not become a director.A person has not paid any call in respect of shares of the company.A person who has been convicted an offence or declared by a court.

Power of Director

Power to buy back its shares Power to issue debentures Power to borrow money from other company or from RBI Power to invest funds for the company Power to make loans Power to fill the casual vacant seat in the board Power to make political contribution Power to recommend ant the rate of dividend in the annual general

meeting Power to appoint any person as Manager or General Manager Power to interfere

Duties of director

Directors owe duties to the corporation, and not to individual shareholders, employees or creditors outside exceptional circumstances

Directors' core duty is to remain loyal to the company, and avoid conflicts of interest

Directors are expected to display a high standard of care, skill or diligence

Directors are expected to act in good faith to promote the success of the corporation

General Duties Directors have general Duties . They are: Duty to act in good faith and not to act contrary to the interest of

the company Duty not to use power for an improper purpose Duty to avoid conflicts of interest  Duty to retain discretionStatutory Duties Section 181: Mirrors the general law duty to act in good faith, in

the best interests of the company and for proper purpose. Section 182: Duty not to misuse position to gain advantage Section 183: Duty not to misuse information to gain advantage Section 184: Directors breach section 181, 182 and 183 for gain

and where the conduct is reckless or intentionally dishonest. Criminal penalty will be applied to against director who breach 184.

Directors Meetings

1.   Frequency of Meeting : within 30 days 2. Calling of Meeting: within 7 days of calling Quorum of Board Meeting: 1/3 of total director Participation of Directors in Board Meetings: Participation is must Passing of Resolution by Circulation:

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