A public limited company must have a minimum of seven members and three directors. The board of directors is responsible for decision making and policy setting through majority rule. A managing director can be appointed for up to five years and one person can only be the managing director of one other company. The duties of directors include acting in good faith and the best interests of the company, exercising independent judgment, avoiding conflicts of interest, and not gaining undue advantages. Directors who contravene these duties can be fined between 100,000 and 500,000 rupees.

1. QUALIFICATIONS AND
DUTIES OF THE
DIRECTORS OF PUBLIC
LIMITED COMPANIES

2. Public Limited Company
• Voluntary association
• Separate legal existence
• Minimum of seven members
• The power of decision making in a company is vested in the
Board of Directors, and all policy decisions are taken at the
Board level by the majority rule.
• Formation of a public limited company requires a minimum of
three directors are required.

3. • If different person are not named as first director in articles of
the company, individual subscribers shall be deemed to be
first directors.
• Every director shall be appointed in general meeting as a
general rule.
• A Managing Director must be an individual and can be
appointed for a maximum term of five years at a time.
• A person who is already a Managing Director of a public
company or a private company can become the Managing
Director of only one other company.

4. • The Companies Act does not prescribe any qualifications for
Directors of any company.
• Total managerial remuneration in the case of a Public
Company cannot exceed 11% of the net profits, and in case of
inadequate profits a maximum of Rs. 87,500 can be paid.
• The Companies Act prevents a Director from being a Director,
at the same time, in more than fifteen companies.
• The directors of a company acting through the board can
exercise all powers relating to the management of a
company's affairs,

5. • The articles of a company may provide for the appointment of
not less than two-thirds of the total number of the directors of
a company in accordance with the principle of proportional
representation
• encourage and promote the sincerest investment of the best
efforts - taking fully mature and wise decisions to avert
unnecessary risks to the company.

6. • A director of a company shall act in accordance with the
Articles of Association (AOA) of the company.
• A director of the company shall act in good faith, in order to
promote the objects of the company, for the benefits of the
company as a whole, and in the best interests of the
stakeholders of the company.
• A director of a company shall exercise his duties with due and
reasonable care, skill and diligence and shall exercise
independent judgment.

7. • 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.
• 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.
• A director of a company shall not assign his office and any
assignment so made shall be void.
• If a director of the company contravenes the provisions of this
section such director shall be punishable with fine which shall
not be less than one Lakh Rupees but which may extend to
five Lac Rupees.