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conduct and management or superintendence over the affairs of the company Only individuals can be directors. Public company three directors Private company two directors
Director is a person who has control over the direction , conduct and management of the affairs of the company. According to Lord Cairns A company cannot act on its own . It can only act through directors, and the relation between the company and directors is that of Principal and agent.
According to Companies Act 1956, Sec 2(13) A Director is defined as any person occupying the position of the director, by whatsoever name called. Only Individuals can be Directors
Qualification of a Director
The Act prescribes no academic or professional qualification for a director. The Articles may provide what qualifications the companys directors must possess. Where the share qualification is prescribed by the Articles, the Act provides that the nominal value of qualification must not exceed Rs.5000/- or one share where its value exceeds Rs.5000/-.
Disqualification of Directors Following persons are not eligible to be directors Persons of unsound mind An Undischarged insolvent
Powers
General powers of the Board
To issue debentures To invest the funds of the company To make calls on shareholders in respect of money unpaid on their shares
Contd
To borrow money To contribute to charitable trusts To remit or give time for repayment of any debt due to the company by a director
Duties Fiduciary duties Duties of skill, care and diligence Attend board meetings Not to delegate his functions
Meetings
General meetings
Class meeting
Notice of meeting
Quorum of meting Chairman of meeting Minutes of meeting
Applicability
Periodicity
Statutory Report
Frequency of Meeting
Ordinary Business
The Central Government on an application from any member of the company may call or give direction to call a AGM if the same has not been held as per the provision of section 166
Penalty for default in complying with section 166 & 167 (section 168)
The company and every officer of the company who is in default shall be punishable with a fine which may extend upto Rs 50,000 In case of continuing default a further fine of Rs 2,500 for each day of default
Exceptions
The central government may exempt any class of company from the requirements mentioned above subject to conditions as it may impose A public company or a private company which is a subsidiary of a public company may by its article fix the time for its AGM and may also in one AGM fix the time for the subsequent AGM A private company which is not a subsidiary of a public company may in a like manner and also by a resolution agreed to by all the members thereof, fix the time and place for its AGM
BOD can call EGM if it has received a requisition from such number of members of the company as mentioned below:
Company having share capital members holding 1/10th of the paid up capital of the company ( voting rights) at the date of the deposit of the requisition Company not having share capital members having 1/10th of the total voting power of all members as at the date of the deposit of the requisition
Notice of Meetings
Contents and manner of service of notice Section 172
Meeting can be called by giving not less than 21 days notice Meeting can be called with shorter notice, if consent is accorded there to * AGM By all members entitled to vote thereto Company having share capital Members holding 95% of the paid up share capital
* Other meeting
Company not having share capital
Board Meetings
Frequency of Meeting (section 285)
At least once in every 3 calendar months and 4 meetings in every year If 4 BMs are held in a calendar year, one in each quarter, the interval between 2 meetings may be more than 3 months Section 25 company (An association not for profit) needs to hold only one meeting in 6 months
Board Meetings
Quorum for Board Meetings
1/3 rd of the Boards total strength or 2 directors which ever is higher Total strength for the purpose means total strength of the Board as reduced by the number of positions vacant at that time Article of association can always fix a higher quorum but not lower number The quorum shall consist of fully qualified and disinterested directors only. Number of the interested directors to 2/3rd of the total strength, quorum shall be the remaining directors present at the meeting being not less than 2.
Resolutions
Resolutions mean decisions taken at a meeting. A motion, with or without amendments is put to vote at a meeting. Once the motion is passed, it becomes a Resolution.
Special Resolution
A special resolution is one which is passed by a 75 % majority only Special resolutions are needed to decide on important matters of the company Examples where special resolutions are required are :a) To alter the objects clause of the memorandum. b) To alter / change the name of the company c) To alter the articles of association d) To buy back Shares issued.