A company can only act through its directors and other human agents, as it has no physical existence of its own. Every company must have a minimum of 3 directors for public companies and 2 for private companies. Certain large companies must appoint at least one woman director. Directors are responsible for managing the company and have various statutory, managerial and other powers to do so, but also face liabilities if they fail to perform their duties properly or act unlawfully or negligently.

1. PRESENTED BY: GROUP 9
Shivam Nagpal - 19DM198
Shubhali Singh - 19DM208
Sonal Jain - 19DM218
Thokchom Sana Ahingba - 19DM228
Rudraksh Jaidka - 19DM239
Anuvesh Sachdeva - 19DM250

2. A company, though a legal entity in the eyes of law, is
an artificial person, existing only in contemplation of
law. It has no physical existence. It has neither soul
nor body of its own. As such, it cannot act in its own
person. It can do so only through some human
agency. The persons who are in charge of the
management of the activities of a company are called
directors.
They are collectively known as Board of Directors or
the Board.
DIRECTOR

3. Every company shall have a Board of Directors consisting of
individuals as directors and shall have—
(a) a minimum number of three directors in the case of a public
company, two directors in the case of a private company, and one
director in the case of a One Person Company.
(b) a maximum of fifteen directors:
- Provided that a company may appoint more than fifteen
directors after passing a special resolution
The following class of companies are required to appoint at least
one Woman Director-
(i) every listed company;
(ii) every other public company having –
(a) paid–up share capital of 100 crore rupees or more; or
(b) turnover of 300 crore rupees or more.

4. The meetings can be conveniently organized through
audio-visual means of telecommunications such as
video conferencing. The following are essential
features of board meetings:
 First board meeting in 30 days
 Four board meetings every year by each company
 Gap between two meetings should not exceed 120 days
 Minimum 7 days notice
 1/3rd of total strength or 2 directors whichever is higher
should be present for meeting.

5.  Residential Director-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.
 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. 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.

6.  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.

7.  A related party, with reference to a company means:
 Director or his/her relative;
 Key managerial personnel or his/her relative;
 A firm, in which a Director, Manager or his/her
relative is a Partner;
 Private limited company in which a Director or
Manager or his/her relative is a member or Director.
 Public limited company in which a Director or
Manager is a Director and holds along with his/her
relatives, more than 2% of its paid-up share capital;

8.  Body corporate whose Board of Directors,
Managing Director or Manager is accustomed to
act in accordance with the advice, directions or
instructions of a Director or Manager.
 Person on whose advice, directions or instructions
a Director or Manager is accustomed to act. (This
section does not apply to persons acting in their
professional capacity)
 Any company which is a holding, subsidiary or an
associate company of such company
 Any company which is a subsidiary of a holding
company to which it is also a subsidiary.

10. Statutory Powers of Directors-:
 Power to authorize new shares.
 Power to approve the financial statement and board’s
report.
 Power to diversify the business of the company.
 Power to approve amalgamation, merger or
reconstruction.
 Power to take over other company and substantial
stake in other company.

11.  Other Powers
 Power to fill casual vacancy.
 Power to appoint the first auditor of the company.
 Power to appoint additional directors.
 Power to declare interim dividend.
 Power to appoint or remove Key Managerial personnel
(KMP)
 Power to declare solvency, where the company winds
up voluntarily.
 Power to recommend the rate of dividend on the
shares of the company.

12. Powers by resolution-:
• To sell or lease any asset of the company.
• To issue bonus shares.
• To contribute money for charitable purposes exceeding
Rs. 50000 or 5% of the average profits of 3 years
whichever is greater.
• To appoint a sole agent for more than 5 years.
• To borrow money in excess of paid up capital and free
reserves.

13. Managerial Powers of Directors-:
• Power to contract with the third party.
• Power to recommend dividend.
• Power to allot, forfeit or transfer shares of the
company.
• Power to form policy and to issue instructions for the
business.
• Power to appoint Managing Director, Manager,
Secretary of the company.
• Power of control and supervision of work of
subordinates.

14. Liabilities Against Company-: The directors will have
to make good for any loss on account of-
• An ultra vires act
• Breach of trust
• For negligence and not performing their duties well
• For dishonest act to make personal profits
• For the activity of the co-directors

15. Liability towards Third Parties-: The directors will be
personally liable towards third parties for-
• Any mis-statement in the prospectus for acting
fraudulently
• Failure to repay application money on non receipt of
minimum subscription
 Acting in their own name without mentioning the
name of the company
 Any liability occuring at the time of winding up
 Acting beyond the powers of the company

16.  Criminal liabilities of Directors-: It states that the company
will be liable with a fine and imprisonment or both.
Reasons are-:
• Issue of Prospectus with untrue or misleading statements
• Filing of annual return by the company before RoC
• Preservation of minutes of meetings by the company
 Maintenance of proper books of account by the company
 No advancement of loan to a director by the company
 Penalty for providing false evidence to authorities
 Penalty for providing false statement or omission of fact

18. THANK YOU