Directors and Remuneration, Managing Directors-Their Appointment, Qualifications, Powers and Limits On Their Remuneration

Directors and Remuneration, Managing Directors-
their Appointment, Qualifications, Powers and

Limits on their Remuneration
9/30/202 BBA 201 BL 1

Topics to be covered :
 Directors and Remuneration,
 Managing Directors-their Appointment,
 Qualifications,
 Powers and Limits on their Remuneration
9/30/202 BBA 201 BL 2

W ho is the
DIRECTOR??
Acc. To the Sec.2(13) of INDIAN C O MPNIES ACT 1956,
”Director includes any person occupying the position of the
director by whatever name called”
Director may be defined as an individual who directs ,

controls or manages the affairs of the company.
The directors of the company collectively are referred to as

the “board of directors” or “board”
9/30/202 BBA 201 BL 3

Appointment of DIRECTORS
The appointment of directors is accordingly regulated by the

act.
Directors may be appointed in following ways:-
By the articles as regard first directors [sec. 254]

By the company in general meeting [sec. 255 to257 ,263 ,
264]
By the directors [sec. 260 ,262 ,313]
By third parties [sec. 255]
By the central government [sec. 408]
9/30/202 BBA 201 BL 4

Disqualification of Directors
Under the Act a person shall not be capable of
being appointed director of a company, for ex, if
(a) he has been found to be of unsound mind by a
Court
(b) he is an insolvent;
(c) he has been convicted by a Court of any offence.
9/30/202 BBA 201 BL 5

Who can be a
Director?
1.A director must be capable of entering into a contract, i.e.,
(a) he must have attained the age of majority,

(b) he must have sound mind and
(c) he must not be disqualified from contracting by any law to
which he is
subject.
2. A director must be a natural person, i.e. not an artificial person

3. A director must have the requisite qualification shares
4. A director must not be disqualified under the circumstances, e.g., if he
is an insolvent or a person convicted by the Court.
9/30/202 BBA 201 BL 6

Managing director
The Managing Director is a director who is "entrusted with any
substantial powers of management".
Position of Managing Director:

Managing Director is a member of the Board of directors. He is a whole
time director who is the chief executive of the company
9/30/202 BBA 201 BL 7

Whole Time
Director:
A whole time director is a director who is entrusted with certain
duties and responsibilities. The appointment of a
managing director or of a whole time director can be
made by any of the methods
(i) an agreement with the company, or
(ii) a clause in a memo or articles of the company, or
(iii a resolution passed by a company in its general
) meeting, or a resolution of the Board of
(iv directors.
)
9/30/202 BBA 201 BL 8

The powers and duties of a managing director are
specified in
(i) the agreement with the company by which he is

appointed or
(ii) in the memorandum or articles of the company or
(iii) in a resolution passed by the company in general
meeting or
(iv) a resolution by its Board of directors.
9/30/202 BBA 201 BL 9

Disqualification of Managing Director
(a) is an insolvent,
(b) suspends, or has at any time suspended, payment to his creditors, or
makes, or has at any time made, composition with them; or
(c) is, or has at any time been, convicted by a Court of an offence
involving moral turpitude.
(d) Any one who is below 25 years or above 70 years of age is usually
disqualified for Managing Director.
9/30/202 BBA 201 BL 10

Number of Managing Directorships:
No person can ordinarily be managing director of more than one
public company or private company which is a subsidiary of a
public company.
He can be managing director of two such companies if the second

appointment is approved by a resolution of the Board of directors with
the consent of all the directors present in a meeting of which specific
notice was given to all the directors in India.
Term of Office
No person can be appointed managing director for a term exceeding five
years at a time for a public company. There is no bar to the
reappointment of a person after the expiry of his term of service.
9/30/202 BBA 201 BL 11

Remuneration of
directors
1. The remuneration payable to the directors of a Company shall

be determined either by the articles, or by a resolution passed
in a general meeting of the members.
2. If a director gives professional service to the company, he may
be paid for it.
3. The remuneration of directors is part of the overall managerial
remuneration which cannot exceed Il% of the net profits.
When profit is inadequate or company is in loss a managerial
person is entitled to a minimum remuneration.
4. A director may receive remuneration either by way of a monthly
payment, or
by way of a fee for each meeting of the Board.
9/30/202 BBA 201 BL 12

Directors and Remuneration, Managing Directors-Their Appointment, Qualifications, Powers and Limits On Their Remuneration

Uploaded by

Copyright:

Available Formats

Directors and Remuneration, Managing Directors-Their Appointment, Qualifications, Powers and Limits On Their Remuneration

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Directors and Remuneration, Managing Directors-Their Appointment, Qualifications, Powers and Limits On Their Remuneration

Uploaded by

Copyright:

Available Formats

Directors and Remuneration, Managing Directors-

their Appointment, Qualifications, Powers and

9/30/202 BBA 201 BL 1

 Managing Directors-their Appointment,

 Powers and Limits on their Remuneration

9/30/202 BBA 201 BL 2

Director may be defined as an individual who directs ,

The directors of the company collectively are referred to as

9/30/202 BBA 201 BL 3

The appointment of directors is accordingly regulated by the

By the articles as regard first directors [sec. 254]

9/30/202 BBA 201 BL 4

9/30/202 BBA 201 BL 5

(a) he must have attained the age of majority,

2. A director must be a natural person, i.e. not an artificial person

9/30/202 BBA 201 BL 6

Position of Managing Director:

9/30/202 BBA 201 BL 7

9/30/202 BBA 201 BL 8

(i) the agreement with the company by which he is

9/30/202 BBA 201 BL 9

9/30/202 BBA 201 BL 10

He can be managing director of two such companies if the second

9/30/202 BBA 201 BL 11

1. The remuneration payable to the directors of a Company shall

9/30/202 BBA 201 BL 12

You might also like