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Types of directors in a company

Courtesy/By: Aarushi Ghai | 2021-01-06 17:58     Views : 222

Director is an individual who is a part of the board of directors of a company. This board is responsible for controlling and managing the affairs of the company. Directors may also be considered as the trustees of the company’s money and property and they also act as the agents of the company by entering into various transactions on behalf of the company. 

The directors have their own duties and responsibility which they are obligated to fulfill. They use their skills, knowledge, and experience while fulfilling these duties. They are expected to make decisions that are beneficial for the company. 

The number of minimum and maximum directors in a company differs depending n what type of company is being established. For example, in the case of a public company, the minimum number of directors required is 3, while in a private limited company the limit is 2, and in the case of one person company, it is 1. 

There are different types of directors in a company, such as: 

  1. Independent directors: the independent directors are basically the non-executive directors of the company. They help to improve the credibility and goodwill of the company and also work towards enhancing the governance in the company. The office period of the independent director is 5 years, however, they can be reappointed by passing a special resolution with the report submitted by the board. Companies usually have one independent director however in the case of Public companies that have the paid-up capital of Rs 10 crores or more or paid-up capital of Rs 100 crores or more, or total outstanding debt, loan, debentures of Rs 50 crores or more, there must be at least two independent directors appointed. 
  2. Residential Directors: According to the law, every company must appoint a director who stays in India or has stayed for at least 182 days in India, such directors are the residential directors of the company.
  3. Nominee Director: A nominee director is the one who has been appointed by a specific class of shareholders of the company, banks, and financial lending institutions or through a third party contract, or by the Union Government when there has been a case of oppression or mismanagement in the company. 
  4. Alternate Directors: Alternate director is the one who is appointed as an alternate member to the board in absence of any of the directors. However, the director which has been replaced must be absent for more than 3 months
  5. Additional Directors: An individual can be appointed as an additional director to the board and occupy his position up till the next Annual General Meeting of the board. 

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.

Courtesy/By: Aarushi Ghai | 2021-01-06 17:58