Types of Directors as per Companies Act, 2013 | LegalRaasta |

Types of Directors as per Companies Act 2013

INTRODUCTION

According to “Section 2(34) of Companies Act 2013 ” a director is appointed to the Board of a Company. There are many types of directors which have a different role to play accordingly. Here in this article we will discuss types of directors in a company according to the companies act, 2013.

TYPES OF DIRECTORS

  1. Residential Director: – According to Section 149(3) of Companies Act,2013, Every company should appoint a director who has stayed in India for a total Period of not less than 182 days in the previous calendar year.
  2. Independent Director: – According to Section 149(6) an independent director is an alternate director other than a Managing Director which is known as Whole Time Director Or Nominee Director. According to Rule 4 of Companies (Appointment and Qualification of Directors) Rules,2013 these are the following type of companies which have to appoint minimum 2 independent directors:-
    I} Public Companies which have Paid-up Share Capital-Rs.10 Crores or More; –
    II} Public Companies which have Turnover- Rs.100 Crores or More:-
    III} Public Companies which have total outstanding loans, debenture, and deposits of Rs. 50 Crores or More.
  3. Small Shareholders Directors: – Small shareholders can appoint a single director in a listed company. But this action needs a proper procedure like handing over a notice to at least 1000 Shareholders or 1/10th of the total shareholders.
  4. Women Director: – As per Section 149 (1) (a), there are certain categories according to which there should be at least one woman as a director on the Board. Such companies are any listed company or any public company having. There are types of directors in women director also:
  • Additional Directors:-
    Any Individual can be appointed as Additional Directors by a company under section 161(1) of the New Act.
  • Alternate Directors:-
    As per Section 161(2), a company may appoint, if the articles confer such power on the company or a resolution is passed (if a Director is absent from India for at least three months).
  • Shadow Director:
    A person who is not the member of Board but has some power to run it can be appointed as the director but according to his/her wish.

RESPONSIBILITY

There are some responsibilities which board of directors has to play:
• determining the company’s strategic objectives and policies.
• monitoring progress towards achieving the objectives and policies.
• appointing senior management.
• accounting for the company’s activities to relevant parties, e.g. shareholders.

DIRECTORS’ POWERS

The decisions which must be made by a resolution of the members are:
Most of the companies have not inserted any special article or did not pass any resolution which says that director does not possess the power to perform certain actions. But according to the Act, it needs a resolution in general meeting which specifies this type of power. The following decisions should be made by the directors but usually also require a resolution of the shareholders:

  • Some loans to directors
  • Directors’ fixed term service contracts for more than 2 years
  • Substantial property transactions in which directors have a personal interest
  • Issue shares
  • Delegation to individual directors:-

The powers noted above are given to the directors collectively. For this, the board must delegate power to the director concerned. Both the Model Articles and Table A permit this.

MINIMUM DIRECTORS REQUIRED IN COMPANY:-

i. One Person Company: – One Director
ii. Private Limited Company: – Two Directors.
iii. Public Limited Company: – Three Directors.

By |2018-10-25T07:00:01+00:00July 24th, 2017|Company Article|0 Comments

About the Author:

Himanshu Jain is the founder of LegalRaasta – India's top portal for registration, trademark, return filing and loans. Himanshu is a CFA (US) & MBA (ISB). He has over 8+ years of corporate / consulting experience with top firms like McKinsey

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