A person who is elected by the shareholder to manage the company affairs as per the AOA and MOA. As a company is a legal artificial person, it can only act through the natural person. However, the director should be a living person, and the management of the company is entrusted to its Board of Directors. The appointment of directors can be required from time to time as per the requirement of the business and shareholders.
The director of the company plays a vital role in the functioning of the company. Day-to-day decisions and operation of the business are handled by the directors. Shareholders invest their money in the company based on the trust of directors.
A person/director who is appointed to the board of the company as per the Companies Act, 2013. The group of board of directors is elected by the shareholder to control the affairs of the company. The company can act only through the agency of the natural person as it is a legal entity that is created by law.
Also, the Director is a person who administrates, controls or directs something. Types of Director in Company
It is the director chosen as per the Articles of Association of the company or a general meeting is to be passed by the board of directors. The board of directors held substantial power of management of company affairs.
Ordinary directors attend the board meetings of a company and participate in matters. The ordinary directors are not whole-time directors or managing directors.
The annual Additional director is appointed by the board of directors between the two annual general meetings held as per the Articles of Association of a Company. These directors have to hold office till the next annual general meeting. However, both directors and additional directors should not exceed the maximum limit, fixed by the Articles of Association.
In most scenarios, the alternate directors are appointed hired for a person who is a non-resident or the Foreign collaborators of a company.
A professional director is a director with professional qualifications and does not have an interest in managing the affairs of the company. Usually, professional directors are appointed hired to use their expertise and experience in the management of the company.
The private equity investors who provide equity to the company and banks, generally demand to appoint their representatives in the team of board of directors. The presenter of these investors is known as Nominee Director.
A corporate body cannot be appointed as the Director in a private limited company. Hence, a living person can only be appointed as the director of the company. A private limited company can have 15 directors maximum, the number can be increased by passing the special resolutions for the directors appointment.
How many minimum directors can the following entities have?
Private Limited Company- Minimum two directors
Limited Company- Minimum three directors.
One Person Company- Minimum one director.
Director in Private Limited Company
The Companies Act, 2013 prohibits the appointment of any foreigner or NRI as the director of the company. Also, according to Section 149(3), every company must have one director who has stayed in India for more than 182 days as per the previous calendar.
At Least there should be one woman as the director in the company for the Listed companies and limited companies which have an annual turnover of more than Rs. 100 crores.
If you are disqualified by the company’s Articles of Association, undischarged bankrupt, or disqualified by the court order, you cannot become the director of the company.
Documents Details required to appoint a director are: DIN No., appointment date, the full name of the new director, date of birth, business occupation, permanent residential address, service address and other directorship details .
Shareholders can remove directors as per the provisions of Companies Act, 2013 resolution S203D. Despite any agreement or contractor with the director, shareholders can remove the directors.
Both shareholders and directors have different responsibilities. Shareholders own the company by owning the shares and directors manage the company. Director does not need shares to become the company director.