1. Directors are responsible for the day-to-day operations and decisions of a business. They must be elected or appointed according to the procedures outlined in the Companies Act. 2. There are different types of directors, including de jure, defacto, shadow, executive, and non-executive. Companies must have a minimum number of directors depending on if they are private, public, or listed. 3. The document outlines the procedures for electing directors, their powers and duties, circumstances for removal or retirement, and penalties for non-compliance with director requirements.

1. DIRECTORS
M FARHAN ALI
Department of Commerce
The Islamia University of Bahawalpur

2. Who is director?
• Directors are the person who are responsible for day to day operations of the
business, and take decisions in their board or committee meeting.
Definition of Director as per section 2 of the Companies act 2017:
• "Director" includes any person occupying the position of a director, by
whatever name called.

3. Kinds of director
• 1. Dejure director
• 2. Defacto director
• 3. Shadow director
• 4. Executive director
• 5. Non executive director

4. Minimum number of directors:-
1. Notwithstanding anything contained in any other law for the time being in force,-
a. Every single member company shall have at least one director;
b. Every other private company shall have not less than two directors; and
c. Every public company other than a listed company shall have not less than three
directors appointed and elected in the manner provided in this Ordinance.
2. Every listed company shall have not less than seven directors to be elected in a
general meeting in the manner provided in this Ordinance

5. First directors and their term
• 1. The number of directors and the names of the first directors shall be
determined in writing by a majority of the subscribers of the memorandum
and until so determined, all the subscribers of the memorandum who are
natural persons shall be deemed to be the directors of the company.
• 2. The first directors shall hold office until the election of directors in the first
annual general meeting

6. Ineligibility of certain persons to become
director:-
No person shall be appointed as a director of a company if he-
• a. is a minor;
• b. is of unsound mind;
• c. has applied to be adjudicated as an insolvent and his application is pending;
• d. is an undischarged insolvent;
• e. has been convicted by a court of law for an offence involving moral turpitude;
• f. has betrayed lack of fiduciary behavior and a declaration to this effect has been
made by the Court under at any time during the preceding five years;
• h. is not a member

7. Removal of directors
• By members(through resolution)
• By operation of law(vacation of office)
• By SECP through disqualification order

8. Retirement of directors
• On the date of the first annual general meeting of a company all directors of
the company for the time being who are subject to election shall stand retired
from office and thereafter all such director shall retire on the expiry of the
term laid down in section
• Provided that the directors so retiring shall continue to perform their
functions until their successors are elected:

9. Validity of acts of directors
• No act of a director, or of a meeting of directors attended by him, shall be
invalid merely on the ground of any defect subsequently discovered in his
appointment to such office:
• Provided that, as soon as any such defect has come to notice, the director
shall not exercise the right of his office till the defect has been rectified

10. Powers of directors:
• 2. The directors of a company shall exercise the following powers on behalf of the
company, and shall do so by means of a resolution passed at their meeting, namely:
• a. to make calls on shareholders in respect of moneys unpaid on their shares;
• b. to issue shares;
• c. to issue debentures
• d. to borrow moneys otherwise than on debentures;
• e. to invest the funds of the company;
• f. to make loans;

11. Powers of directors:
• g. to declare interim dividend; and
• h. to approve annual or half-yearly or other periodical accounts as are
required to be circulated to the members;
• i. to approve bonus to employees;
• j. to incur capital expenditure on any single item or dispose of a fixed asset in
accordance with the limits as prescribed by the Commission from time to
time];
• k. to undertake obligations under leasing contracts exceeding one million
rupees;

12. Creditors may nominate directors
• In addition to the directors elected or deemed to have been elected by
shareholders, a company may have directors nominated by the company's
creditors or other special interests by virtue of contractual arrangements

13. Procedure for election of directors
• 1. The directors of a company shall fix the number of elected directors of the
company not later than thirty-five days before the convening of the general
meeting at which directors are to be elected, and the number so fixed shall
not be changed except with the prior approval of a general meeting of the
company.

14. Procedure for election of directors
• 2. The notice of the meeting at which directors are proposed to be elected
shall among other matters, expressly state-
a. The number of elected directors fixed; and
b. The names of the retiring directors

15. Procedure for election of directors
• 3. Any person who seeks to contest an election to the office of director shall,
whether he is a retiring director or otherwise, file with the company, not later
than fourteen days before the date of the meeting at which elections are to
be held, a notice of his intention to offer himself for election as a director:
• Provided that any such person may, at any time before the holding of
election, withdraw such notice

16. Procedure for election of directors
• 4. All notices received by the company shall be transmitted to the members
not later than seven days before the date of the meeting,
• For listed company: such notice of general meeting shall be published in
English and Urdu language at least in 1 issue each of a daily newspaper of
respective language having wide circulation

17. Procedure for election of directors
• 5. The directors of a company having a share capital shall, unless the number of
persons who offer themselves to be elected is not more than the number of directors
fixed be elected by the members of the company in general meeting in the following
manner, namely:-
a. member shall have such number of votes as is equal to the product of the
number of voting shares or securities held by him and the number of directors to be
elected;
b. A member may give all his votes to a single candidate or divide them between
more than one of the candidates in such manner as he may choose
c. The candidate getting highest votes elected as director and then the candidate
getting next highest votes shall be so declared and so on until directors elected has
been so elected.

18. Procedure for election of directors
6. The directors of a company not having share capital shall be elected by
members of the company in general meeting in the manner as provided in
articles of association of the company.]

19. Circumstances in which election of directors
may be declared invalid
• On application of members having at least 10% voting power
• Within 30 days of the date of election
• Court may declare election of all directors or any one or more of them invalid
if satisfied that there has been material irregularity in election procedures.

20. Consent to act as director to be filed with
registrar
• 1. No person shall be appointed or nominated as a director or chief executive
of a company or represent as holding such office, nor shall any person
describe or name any other person as a director or proposed director or chief
executive or proposed chief executive of any company, unless such person or
such other person has given his consent in writing for such appointment or
nomination.
• 2. the consent given to the company shall be filed with registrar within 15
days thereof

21. Penalties
• Whoever knowingly and willfully contravenes or fails to comply with any of
the provisions of sections or is a party to the contravention of the said
provisions shall be liable to a fine which may extend to ten thousand rupees
and may also be debarred by the authority which imposes the fine from
becoming or continuing a director of the company for a period not exceeding
three years