4. POSTIONS HELD BY THE DIRECTORS:
•MANAGING DIRECTOR
•MANAGER
•WHOLE TIME DIRECTOR
5. OFFICER IN DEFAULT
Section 2(60) of the Companies Act, 2013,
provides that for the purpose of any provision
in this Act which enacts that an officer of the
company who is in default shall be liable to
any penalty or punishment by way of
imprisonment, fine.
7. CHANGE IN LAW CONCERNING
DIRECTOR ACCORDING TO NEW
COMPANIES ACT 2013
8. • At least one women director for prescribed
class or classes of companies.
• The woman directors is been mentioned in
section 149(1) of the companies act 2013
•At least one director shall be a person who
has stayed in India for at least 180 days in e
previous calendar year.
•Listed companies may have directors 1
directors elected by small companies.
9. COMPANIES ACT 1956 COMPANIES ACT 2013
According to 1956 act the maximum limit
of directors in a company was 12
Approval of central government was
necessary.
According to new companies act, 2013 the
maximum limit of directors in a company has
been increases from 12 to 15.
Further to that can be made by passing the
special resolution.
Approval of central government has been
dispensed off.
A company can become a director for
only 15 companies
A company can become a director for only 20
companies instead of 15.
Out of this 20 companies he cannot be directors
of more than 10 public company.
The amount to be deposited along with
the notice of nomination to any person
to the office of directors was Rs.500.
The amount to be deposited along with the
notice of nomination to any person to the office
of directors has been increased from Rs.500 to
Rs. 100000 or such higher amount as may be
prescribed.
11. •Separate definition of independent directors is there
under section 2 (47) of the companies act 2013.
•Listed company to have at least 1/3rd of the total
number of directors as independent directors.
•No. of independent directors for an unlisted
company and its subsidiaries will be prescribed by the
central government.
INDEPENDENT DIRECTORS
12. ROLE AND FUNCTIONS OF THE INDEPENDENT
DIRECTORS:
The independent directors shall:
(i) help in bringing an independent judgment to bear on the Board’s deliberations
especially on issues of strategy, performance, risk management, resources, key
appointments and standards of conduct;
(ii) bring an objective view in the evaluation of the performance of board and
management;
(iii) scrutinize the performance of management in meeting agreed goals and
objectives and monitor the reporting of performance; (iv) satisfy themselves on the
integrity of financial information an
d that financial controls and the systems of risk management are robust and
defensible;
The independent directors shall:
(i) Help in bringing an independent judgment to bear on the Board’s deliberations
especially on issues of strategy, performance, risk management, resources, key
appointments and standards of conduct;
(ii) Bring an objective view in the evaluation of the performance of board and
management;
(iii) Scrutinize the performance of management in meeting agreed goals and
objectives and monitor the reporting of performance;
13. (v) Safeguard the interest of all stakeholders, particularly the
minority shareholders;
(vi) Balance the conflicting interest of the stakeholders;
(vii)Determine appropriate levels of remuneration of executive
directors, key managerial personnel and senior management and
have a prime role in appointing and where necessary recommend
removal of executive directors, key managerial personnel and
senior management; and
(viii) Moderate and arbitrate in the interest of the company as a
whole, in situations of conflict between management and
shareholder’s interest.
21. The major responsibility of the Board of Directors is to
direct the affairs of the company and to exercise such
control that the wealth and wealth creating assets of the
company are protected.
RESPONSIBILITIES OF DIRECTORS
22. The responsibilities under The Companies Act, 1956 includes:
Keeping proper book of accounts and preparing annual accounts and director’s report for
presentation to the company’s shareholders;
• Filing of accounts and returns annually with the Registrar of Companies, Income Tax
departments and other statutory departments;
•Filing of various resolutions with Registrar of Companies and seeking approvals from The
Registrar of Companies, Company Law Board, Central Government and High Court.
•Informing The Registrar of Companies of the appointment or retirement of any director or
the company secretary or of any change in the situation of the company’s registered office and
of many other events including allotments of shares;
•Appointing auditors;
• Calling and holding Annual General Meetings each year, at which the annual accounts are
presented and;
• Making sure that the company acts strictly in accordance with the powers and rules set out in
its memorandum and articles of association
35. •A director may resign from his office by giving a notice in writing to the
company and the board shall take note of same. The company shall intimate
the registrar and shall also place the fact of registration in the report of the
directors laid in the immediately following the general meeting by the
company.
•A director shall also forward a copy of his resignation to the registrar along
with the detailed reason within 30 days of resignation.
•The resignation shall take effect from the date on which the notice is received
by the company or the date specified by the director in the notice, whichever is
later.
•The directors who has resigned shall be liable even after his resignation for
the offences which occurred during his tenure.
36. CASES
Registrar of Companies V. Orissa Paper Products Ltd.,
(1988) 63 Comp cases 460 (Ori)
Resignation of a director must be addressed to the Company.
Letter of resignation addressed to third party shall have no effect
Chokkalingam Chettiar V. Official Liquidator
1943 13 Comp. cas. 263 Mad.
A director who has resigned would not be liable for anything that
happens subsequently.
37. The petitioner who was the Chairman and the director of the accused company tendered his
resignation both as Chairman and Director on 4.10.1999 and his resignation was sent to the
Registrar of Companies on the same date.
The respondent company on the other hand has alleged in its complaint that 16 cheques
issued by the company between 3.2.2000 and 15.2.2000 amounting to Rs.17.50 lakhs had
bounced and sought his prosecution on the ground that the petitioner Chairman was
responsible for the conduct of the day to day affairs of the company.
The court held that where the resignation letter states that it has to take effect immediately,
the date of resignation letter is taken to the date on which the director has resigned i.e.,
4.10.1999. He was no longer on the board after that date either as director of Chairman.
All the cheques were drawn between 3.2.2000 and 15.2.2000 during which the period the
petitioner did not function as Chairman and director of the company. Also he was not in
charge and responsible for the affairs of the company when the cause of action had arisen.
The proceedings are liable to be quashed.
S.B. Shankar V. Amman Steel Corporation
(2002) 51 CLA 341
40. KHETAN INDUSTRIES PRIVATE LIMITED
VS.
MANJU RAVINDRA PRASAD KHETAN
In this case it was held by the court that the
shareholders have a right to remove the directors
under section 284 by passing ordinary resolution and
section 284 provides an inbuilt mechanism for the
enforcement of the right and civil court has no
jurisdiction to entertain the suit for removal of
director.