What is the role of a director in a company
Hemlata Khandelwal / 2021-12-10 05:51:02

Role of Director in a company

 “Director” is a person who runs a company or institution. , As per the Companies Act, 2013 –

Director The term "director" has been defined as any person who is entitled to be appointed to the Board of the Company. Directors Board of directors means the group of persons who are elected by the shareholders of a company to manage the affairs of the company. Because a company is an artificial legal person. This is created by law. And it should act only through the agency of natural persons. It can only act through humans. And it is the director with whose help the company mainly works. Therefore, the management of a company is entrusted to a body of persons. Which are called the "Board of directors".

Thus the minimum number of directors required for different types of companies are as follows.

  • For Private Limited Company – Minimum Two Directors (Directors)
  • For a limited company – minimum of three directors
  • For One Person Company Minimum Director(s)

In today's time Private Limited Company which has Rs. Share capital of Rs. 100 crores or more. Or it is necessary to appoint at least one woman director (Women Director) with a turnover of Rs.300 crores or more. But no woman director is required for private limited company registration.

Only one person (a living person) can be appointed as a director of the company. A body corporate or business entity cannot be appointed as a director of the company. A company can have a maximum of fifteen directors and this can be increased further by passing a special resolution.

  • A Director In how many companies can there be a Director.
  • A director can be in a maximum of 20 companies.
  • A director can be a director in a maximum of 10 public companies.

Is it mandatory to have a woman director in a women's company?

The company which is limited and whose paid-up capital in the last audited financial statement is 100 crores or turnover is 300 crores. Being is mandatory.

For an individual to become a director at the time of private limited company registration in India, he/she is required to have a Director Identification Number (DIN Number). DIN number can be obtained from any person who is above 18 years of age can apply to the DIN cell. Without DIN a person cannot become a director.

DIN is an eight-digit director's director identification number. This number is allotted by the central government to any person who is going to become a director or is an existing director of a company and the DIN number has lifetime validity.

The director's details are kept in the database with the help of the Director Identification Number (DIN). If he is a director in 2 or more companies. Even then he has to do only 1 DIN number. And if he leaves one company and joins another. Even then the same DIN will work in other companies also.

What are the duties of a Director?

  1.  Auxiliary duty
  • It is the duty of a director in any company to act in accordance with the articles of the company subject to the provisions of a director of a company. was not to act in a malicious manner.
  • No such work should be done by the director (director) in which there is some personal benefit of the director.
  • Directors cannot earn any kind of secret profit.
  1.  Duty of care and skill

Directors, In order to promote the objects of the Company for the benefit of its members as a whole and the best interest of its employees, shareholders, community, and the Company, must look after.

  1.  Duty to attend board meetings                    
  • The director should give due attention to the affairs of the company.
  • Not bound to attend all board meetings. Yet that constant absence may motivate his fellow directors to do such work.
  1. Duty not to delegate
  • The tasks assigned to the Director to perform. Their work should be done by the director. He shall exercise his duties with skill and diligence and shall exercise independent judgment
  • Representation of unnecessary works should be avoided.
  1.  Duty to disclose constitutional duties
  • Under section 184 the director should not conceal any of his facts. For this let me give you an example.
  • Suppose a company wants to place an order on another company. Another company belongs to the brother of a director. In such a situation, he will have to tell this thing to the other members of the board.
  • At the same time, according to the rules, he will have to be absent from that board meeting because if he is present, a situation of pressure may arise in the decision taken by the board. If, he is found guilty of making any undue advantage to himself or to his relatives, associates, or associates and to such director. Then he shall be liable to pay an amount equal to that profit to the company either does not endeavor to profit.
  1.  Statutory duty

The director also has some statutory duties like this.

  • Section 39 - Allotment of shares should not be done until at least one has become a member.
  • Section 92 - It is the duty of the director to sign the annual statement and certificate.
  • Section 96 - Annual General Meeting to be called on time every year.
  • Section 100 – On the demand of extraordinary general meeting (EGM), calls them meeting on time.
  • The profit and loss balance sheet are to be prepared.

If any director contravenes this. So there is a provision that he shall be punishable. That may extend to five lakh rupees.

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