COMPANY

MANAGEMENT
INTRODUCTION

 A company in the eyes of the law is

an artificial person.
 It has no physical existence
 “the company itself cannot act in its
own person, for it has no person, it
can only act through directors, and
the case is, as regards those
directors, merely the ordinary case of
principal and agent”
The directors are the brain of
a company - comment
 They occupy a pivotal position in
the structure of the company

 They are in fact the mainspring

of the company
Definition of a Director

 A person having control over the

direction, conduct, management
or superintendence of the affairs
of a company
Who can become Director?

 Only individuals can become

directors
 A body corporate, association or
firm cannot be appointed
director of a company.
Number of directors

 Every public company shall

have at least 3 directors and
every other company (e.g., a
public company) at least 2
directors
Increase or reduction in
number of directors
 Subject to the statutory
minimum limit, the Articles of a
company may prescribe the
maximum and minimum number
of directors for its Board of
Directors.
 It can be done by passing
ordinary resolution of the
company in general meeting.
APPOINTMENT OF DIRECTORS
 The appointment of directors are
classified as
 Appointment of first directors
 Appointment of directors of company
 Appointment of directors by Board
 Appointment of directors by creditors
etc.
 Appointment of directors by proportional
representation
 Appointment of directors by the central
government
Powers of Directors

General Powers Of The Board:

* First, the Board shall not do any act
which is to be done by the company in
general meeting.
* Second, the Board shall exercise its
powers subject to the provisions
contained in the Companies Act, or in
the Memorandum or the Articles of the
company or in any regulations made by
the company in general meeting
 Powers To Be Exercised At Board
Meetings:
(a)make calls on shareholders in
respect of money unpaid on
their shares.
(b) issue debentures.
(c)borrow money otherwise than
on debentures .
(d)Invest the funds of the
company ;and
(e)Make loans.
POWERS TO BE EXERCISED WITH THE
APPROVAL OF THE COMPANY IN
GENERAL MEETING. (sec 293)

(a) To sell, lease or otherwise dispose of the

whole, or substantially the whole, of the
undertaking of the company.
(b) To remit or give time for repayment of any
debt due to the company by a director except
in the case of renewal or continuance of an
advance made by a banking company to its
director in the ordinary course of business.
(c) To invest the amount of compensation received
by the company in respect of the compulsory
acquisition of any undertaking or property of
the company.
(d) To borrow moneys where the moneys to be
borrowed are more than the paid-up capital of
the company and its free reserves.
Legal position of directors

 Directors as Agents
 Directors as trustees
 Directors as employees
 Directors as officers
BOARD OF DIRECTORS

 Individuals elected by
stockholders to establish
corporate management policies
and make decisions, such as if
and when dividends will be paid
to stockholders.
MANAGING DIRECTOR
 A Managing Director means a director who
is entrusted with substantial powers of
management which would not otherwise be
exercisable by him.
 The powers can be conferred on the
Managing Director through an agreement
with the company or a resolution passed by
the in general meeting or by its Board or by
providing necessary provision in
Memorandum or Articles of Association.
 According to Sec 2 (26) of the Act, a
Managing Director exercises his powers
subject to the superintendence, control and
direction of the Board of Directors.
 Duties and responsibilities of chairman
The chairman should make efforts to preserve order
during the meeting.
He should ensure that all shades of opinion are given a
firm and fair hearing so far as practicable.
It is his duty to ensure that the sense of the meeting is
accurately ascertained and recorded.
He should ensure that meeting starts and finishes on
time.
He should see that the rules of standing orders are
followed by the speaker and ensure that all speeches
are addressed to the chair and receive a fair hearing.
He must disallow “points of order” which attempts to
bring up points of substance in disguise.
He should be impartial in the meeting and should see
that the minority is not stifled or oppressed in any
way.
He has the responsibility of ascertaining the quorum and
number of members prescribed as competent to
transact business.
Powers of the Chairman
 The power of closure of meeting.
 To bring the discussion on any question
to close.
 To decide upon points of order and any
incidental questions which are to be
taken as prima facie correct
 To adjourn the meeting.
 To put an ordinary (when he is a
member of the company) as well as
casting vote.
 His decision as to validity of proxies is
final
 To expel a member from the meeting if
he seriously interferes with the conduct
of the meeting after warning the
member
THANK YOU
topics2c.blogspot.com
http://topics2c.blogspot.com