A nominee director is formally appointed to represent the interests of an entity like a financial institution or government. Under Indian law, a nominee director is considered a full director with all attendant duties and liabilities. While a company cannot indemnify directors for negligence or breach of duty under prior law, the new Companies Act does not restrict this. A company's articles and directors' liability insurance can help cover liabilities of a nominee director as a non-executive director, whose responsibilities are already limited to acts done with their consent or without due diligence.
Define the term “principal officer” in the Companies Act - Dr S. ChandrasekaranD Murali ☆
Define the term “principal officer” in the Companies Act - Dr S. Chandrasekaran - Article published in Business Advisor, dated February 25, 2017 - http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
Directors role responsibility_singapore_acraFuturebooks
We examine your rights, roles and responsibilities as a director of a Singapore private limited company.
A director is the person responsible for managing the affairs of the company and providing it with directions.
You are required to make decisions objectively, act in the best interest of the company, and be honest and diligent in carrying out your duties.
More here: http://futurebooks.asia/blog/roles-and-responsibilities-of-a-director-in-a-singapore-startup/6261
Resignation of director – A new provision: Duty of director, Board and compan...D Murali ☆
Resignation of director – A new provision: Duty of director, Board and company - Dr S. Chandrasekaran - Article published in Business Advisor, dated August 25, 2014 http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
Define the term “principal officer” in the Companies Act - Dr S. ChandrasekaranD Murali ☆
Define the term “principal officer” in the Companies Act - Dr S. Chandrasekaran - Article published in Business Advisor, dated February 25, 2017 - http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
Directors role responsibility_singapore_acraFuturebooks
We examine your rights, roles and responsibilities as a director of a Singapore private limited company.
A director is the person responsible for managing the affairs of the company and providing it with directions.
You are required to make decisions objectively, act in the best interest of the company, and be honest and diligent in carrying out your duties.
More here: http://futurebooks.asia/blog/roles-and-responsibilities-of-a-director-in-a-singapore-startup/6261
Resignation of director – A new provision: Duty of director, Board and compan...D Murali ☆
Resignation of director – A new provision: Duty of director, Board and company - Dr S. Chandrasekaran - Article published in Business Advisor, dated August 25, 2014 http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
This ppt. includes brief about the Memorandum of Association (MOA) and Clauses of Regulatory Framework of Companies :-
1.Introduction, meaning and importance of MOA
2.Purpose of MOA and Contents
3 Clauses of MOA well defined and tuned
Registration and establishment of qs company in sri lanka Ishanthi Perera
In Sri Lanka company establishment is done under Companies Act No 07 2007. According to the purpose of the company type of the company will be decided considering the advantages & disadvantages of it.
When considering the registering process of Limited Liability Company it will be done as per the Companies Act No 07 of 2007. It will give the vast description of company registration in Sri Lankan contest.
Memorandum of association and Articles of association and partnership deed an...Aniruddha Dey
An study on memorandum of association and Articles of association. It contains the difference between memorandum of association and Articles of association, partnership deed and sales agency agreement and effects of registration of Memorandum of association and Articles of association while incorporating a business. All precisely.
This ppt. includes brief about the Memorandum of Association (MOA) and Clauses of Regulatory Framework of Companies :-
1.Introduction, meaning and importance of MOA
2.Purpose of MOA and Contents
3 Clauses of MOA well defined and tuned
Registration and establishment of qs company in sri lanka Ishanthi Perera
In Sri Lanka company establishment is done under Companies Act No 07 2007. According to the purpose of the company type of the company will be decided considering the advantages & disadvantages of it.
When considering the registering process of Limited Liability Company it will be done as per the Companies Act No 07 of 2007. It will give the vast description of company registration in Sri Lankan contest.
Memorandum of association and Articles of association and partnership deed an...Aniruddha Dey
An study on memorandum of association and Articles of association. It contains the difference between memorandum of association and Articles of association, partnership deed and sales agency agreement and effects of registration of Memorandum of association and Articles of association while incorporating a business. All precisely.
Note on liabilites of directors as per Companies Act, 2013 by CS Pratik ShahCS Jigar Shah
Liability of Directors under new Companies Act, 2013.
Companies which are function through Board of Directors (Board) and the board plays an important role in complying with the requirements of Companies Act, 2013 (“New Act”).
CA13 has enhanced the liabilities and obligations of the directors. CA13 regime prescribes management and inspection of documents in electronic form, electronic voting, electronic notices, etc that require a techno-legal compliance on the part of companies. The directors are under an obligation to comply with techno legal requirements of not only the New Act but also the Information Technology Act, 2000 and other related laws.
CA13 has also increased monetary penalties and imprisonment. The civil and criminal liabilities are not just on directors but include “Officers in Default”.
Article try to elaborate important aspects of CA13.
Prepared by CS Pratik Shah, Practising Company Secretary.
The Companies Act 2013 has introduced significant changes in the composition of the board of directors of a company. This White Paper contains the description of some provisions related to Independent Directors which have been modified in Companies Act 2013.
Discussion on Chapter X - Audit and Auditors under the Companies Act, 2013Manoj Singh Bisht
In this presentation, i have tried my best to discuss various facets of provisions contained in Chapter X of the Companies Act, 2013. In few places, only relevant part of a particular section is quoted.
These are my personal views.
For feedback - you can reach out to me at csmanojsbisht@gmail.com
Corporate M&A partner Fergus Bolster and International Business partner Emma Doherty launch the Matheson Director's Guidance Series with a guidance statement covering the Principal Duties of Directors under Irish Law.
Indemnification to Nominee Director- Allowed or not-CA 2013
1. WHETHER A NOMINEE DIRECTOR CAN BE INDEMNIFIED BY THE COMPANY FROM STATUTORY
LIABILITIES?
First of all it is important to understand, who is a Director and who is Nominee Director under the
Corporate Laws and what is the scope under which he has to work. The term Nominee Director was not
defined anywhere in the Companies Act, 1956, but under the new Companies Act, 2013 a specific
definition is specified for the aforesaid term. Before understanding the definition of Nominee Director,
the word “Director” and its scope should be clear.
Section 2(34) of New Companies Act, 2013 defines Director as:
"Director" means a director appointed to the Board of a company;
The case law, Corporate Affairs Commission vs Drysdale (1979), further identifies the “de-jure” director
and “de-facto” director.
De-Jure Director - A de jure director is a director who is formally appointed and registered as a director
with the registrar of companies.
De-facto director - A de facto director is not formally appointed but carries out all the duties of and
makes decisions as a director.
Since the Nominee Director is appointed under the provisions of law, so he is included in the term Director.
Nominee Director – Definition- The explanation to Section 149(7) defines “Nominee Director” as a
director nominated by any financial institution in pursuance of the provisions of any law for the time
being in force, or of any agreement, or appointed by any Government, or any other person to represent
its interest.
Thus, if a director is appointed under an agreement (Shareholder’s Agreement/Share Purchase agreement
etc.), then he will be in covered under definition of Nominee Director.
Is Nominee Director an Independent Director?
Section 149(6) of the New Companies Act, 2013 specifically excludes the Nominee Director from the scope
of independent director. The said Section says “An independent director in relation to a company, means
a director other than a managing director or a whole-time director or a nominee director”.
The amended listing agreement issued by SEBI dated 17th
April, 2014, also excludes nominee director from
independent director’s definition. The extract of which is as follows:
Clause 49(II)(B)(1) of the Listing Agreement says, “for the purpose of the clause A, the expression
‘independent director’ shall mean a non-executive director, other than a nominee director of the
company”
2. Therefore, from the above definitions, the intention of law is very much clear that the Nominee Director
is considered as a full-fledged director with all duties, responsibilities and liabilities provided under the
law.
Moving further, the New Companies Act, 2013 specified duties of director very clearly.
Duties of Director-
Section 166- (1) Subject to the provisions of this Act, a director of a company shall act in accordance
with the articles of the company.
(2) A director of a company shall act in good faith in order to promote the objects of the company for
the benefit of its members as a whole, and in the best interests of the company, its employees, the
shareholders, the community and for the protection of environment.
(3) A director of a company shall exercise his duties with due and reasonable care, skill and diligence
and shall exercise independent judgment.
(4) A director of a company shall not involve in a situation in which he may have a direct or indirect
interest that conflicts, or possibly may conflict, with the interest of the company.
(5) A director of a company shall not achieve or attempt to achieve any undue gain or advantage either
to himself or to his relatives, partners, or associates and if such director is found guilty of making any
undue gain, he shall be liable to pay an amount equal to that gain to the company.
(6) A director of a company shall not assign his office and any assignment so made shall be void.
Liabilities of Nominee Director –
Section 149(12) of the Companies Act, 2013 defines the liabilities of a non-executive director. The extract
of the said section is as follows:
“Notwithstanding anything contained in this Act,--
(i) an independent director;
(ii) a non-executive director not being promoter or key managerial personnel,
shall be held liable, only in respect of such acts of omission or commission by a company which had
occurred with his knowledge, attributable through Board processes, and with his consent or connivance
or where he had not acted diligently.“
Thus, the liability of the Nominee Director, who is a non-executive director is limited to the acts which
are occurred with his knowledge, attributable through Board processes and done through his consent in
the decision or where the NED has not acted with diligence.
3. Indemnification to Nominee Director allowed?
Section 201 of the Companies Act, 1956 had restricted the Company to indemnify the directors of the
Company. Section 201 reads as:
201. Avoidance of provisions relieving liability of officers and auditors of company.
(1) Save as provided in this section, any provision, whether contained in the articles of a company or in
an agreement with a company or in any other instrument, for exempting any officer of the company or
any person employed by the company as auditor from, or indemnifying him against, any liability which,
by virtue of any rule of law, would otherwise attach to him in respect of any negligence, default,
misfeasance, breach of duty or breach of trust of which he may be guilty in relation to the company,
shall be void;
Thus, for the acts of director before 01.04.2014, the Company cannot indemnify the director.
Though, New Companies Act, 2013 doesn’t not have any such restriction. Though, there is a provision
for taking Directors’ and Officers’ Liability Insurance as per section 197(13) of the New Companies Act,
2013 for liabilities of negligence, default, misfeasance, breach of duty or breach of trust. The articles of
the Company are also deciding factor in the issue.
Thus, taking into consideration all aspects, the liabilities of the Nominee Director who is a non-executive
director are already limited and that too can be covered by the Directors’ and Officers’ Liability Insurance.