Introduction of Director
Director is nothing but is appinted by shareholder for the regulation, visilance of the company because as company is not an person who can cantrol the company affairs and works therefore diector are appionted to control and manage the regualation according to the article and association of the company beacause a company is an artifiacal person. and the director should be unbaised.
- Section 2(34) to appointed to a board of the company.
- in public ompany there should be minimum 3 directors and maximum 15, aleast 1/3 rd be independence directors.
- in private company there should be minimum 2 directors and maximum 15 directors, atleast 1 women directors should be there , in both public and of the private company.
- Atleast 1 director who stayed in INdia for minimum 182 days in the previous calender year.
- A director must act in accordance of the article of association , he should ensure the visilance mechanism and he must have independence judgement.
- Transaction of the business are also governed by the it i.e. “proxy transaction” also he participate when rhere is conflict of the interest in the company.
Liabilities of a Director
- Liability for tax , it is related to the income tax act.
- misstatement inprospectus
- its not liable if it not proved.
- he withdrew his consent begore prospectus was issue.
- once he become aware of the false statement he withdrew his consent.
- he believed the doubted statement to be true.
- share appliccation money refund
- return the money within 15 days after the 30 days are expired so that they couldn’t reach on the minimum subscription.
Leagl position of Director
- Diretor as an agent
- the comapny itself cannot act, it can act only through directors and by the reason of which a relatio of principle and agent is establised between the companise and directors and he act as an eye of a company.
- Dirrector as trustee
- they are the trustees of the company money or property which comes into their hands or which is actually under their control and of the power interested to them. although they are the agents of the company they are not employee of the company, hence they can not claim remunerations as a preferential creditors in the event of winding up of a company according to section 327.
- Director as a managing partner
- they are also described as managing partner of afirm because , like a partner of a firm thay manage the affairs of the company and also they ususakky important shareholders of the company.
- As an employee
- they can not be an employee of the company as in section 327, preferential creditors are given.
Classification
- The companese( appointment and qualification of the it) rule 2014
- section 149(1) read with rule 3rd of the 2014. rules, says that every company must have a women diretors listed companiese and piblic companese having turnover of 300 cr rupees or more.
- time frame for the appointment
- every company must appoint a women director within 6 month if the incorporation in certain case of an extention of 6 months according to section 149(2).
- In case vacany
- within in 3 month there has to appointment or the till the next board meeting whichever is later , to appoint awomen directors.
- Independent director
- there should be an independence director in every comapnese, according to section 149(4).
- independence directors play an important role in maintaining a transparent working environment in the corporate regime , they are expected to have impartial and unbaised objective judgement for the proper functioning of the company.
Who can be an independence director of the company
- section 149(6) provide the description who can be an independence directors of the company.
- he should be the person of integrity must posses experties.
- he should not be the promotor of the company.
- he shou;ld not be related to the promoter of the company
- he should not have pecunary relation with the company.
- section 149(4)
- talk that in a public company there can be 1/3 rd should be an independence diectors, the term for the appointment is given in section 152 for the 5 year and for 2 consecutive reappoints there should be aspecial resoultion , according to section 152.
Code of independence directors
- Ethical standard
- to act objectively(unbaised) while exercising his duties
- assistence to the company ensuring best corporate governance.
Functions
- to scrupnise the performance of the management
- to balance the conflicting interest of all stakeholders
- to moderate and arbitrate in the interest of the company.
Manner of appointment
- According to section 168 the appointment should be approved in the meeting of the shareholders.
- the appointment ketter of an independent director contain that
- term of appointment
- expectations
- code pf the business.
Manner of removal of an independence
- When an independent director removed the new director will be appointed within 180 days of the removal. according to section 169 and resignation as per section section 168.
Manager in comapny
- A manager is the person who is incharge of the specific unit
- manager is the middle level of management
- it is appointed for short term planning
- they are accountable to directors.
Director identity number
According to section 153 by central government it is a 8 digit unit or number. the basic purpose of obtaining “director identity number” by the directors is to get themselves registered in the ” data base ” of the government authority.
key managerial personnel
Trustee of the company and directors of the company according to section 149 of this act, key managerial personnel , these are refers to the ” gruop of the people who are incharge of maintaining the operation of the company.”
Example : directors, chief executiv oficers(CEO), whole/ full time director, company secretary, chief financial officers(CFO).
Reference: orginal notes written by Riya Tiwari student of LLB of United university Prayagraj Uttar.