Corporate Law

Director of Company and their Types

Director

Shareholders are the owner of the company but they did not participate in company management affairs in routine. So they hired the staff for the management and directions of business activities. These are calling as Business Directors. They are the employees of the company and work as per assigned duties with their rights.

He is a person who is appointed or elected by the majority of the shareholders to run, control and manage the business activities within the given authority. According to Companies Act, 2006 director must have an age of 16 years. This is the minimum age requirement.

Director Definition: an executive is a man who is in charge of the general heading of business.

Minimum No of Limit

  • Minimum one director in Private Ltd Company
  • Minimum two directors in the Public limited company

Appointment of Business Directors

  1. In the first case, they are appointed by the promoters or subscriber of the company at the time of incorporation with the written consent of them.
  2. In the first annual general meeting, existing directors are automatically retired. The new appointment is made by the shareholders. It may hire the retired or new ones. It should be according to an article of association of company for appointing SOP.
  3. Board of the director may appoint the new director in case of the vacant director without prior approval of shareholder and that director work till the next Annual General Meeting.

Types of Business Directors

Shadow Director: is not appointed as a director but due to having a major part of shares influence on the board of director can influence the decisions.

Alternate directors: A director may appoint an alternate director for attending the meeting and to vote on behalf of it if the article of association permits to do so.

Executive directors: these are the member of the board of directors, who have a significant and specific role in management. Like finance director, Sale Director, Marketing director

Non-Executive Directors are just the members of the board of directors, generally, play a role only in the meetings but have not any specific task in the management.

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