Scribd
Upload
17 views

Directors Powers and Duties-1

Uploaded by

Mohit Rana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
17 views

Directors Powers and Duties-1

Uploaded by

Mohit Rana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Directors – Powers & Duties of Directors Explained

A Company is an artificial person and hence, is not capable to work on


its own. As a consequence there is a need to appoint director in every
Company. A Director is the person appointed to the Board of a Company.
Director is responsible for management of the Company of which he is a
director. Board of Directors refers to the collective body of directors who
are in charge of smooth running of business.
Who can be a Director?
Managing a Business is not an easy task. Therefore there are eligibility
criteria for a person to become a Director.

 Only an Individual person can become a Director of the Company.


A person other than individual is not eligible to become a director.
 Furthermore, a minor individual cannot become director of
Company as he is not eligible to obtain DIN as well as cannot file a
valid consent to act as director.
 At least one director of Company should be Resident of India.
 Moreover the person acting as Director should be :-
o of sound mind
o capable to enter into a contract
o not an insolvent person.

Powers and Duties of a Director


The Companies Act 2013 defines the powers and duties that a Director
should take care of while acting on behalf of the Company. Sections 179 and
166 of Companies Act 2013 prescribes the powers and duties of a Company
Director respectively.
Powers of Directors
According to Companies Act 2013, the Board of Directors of a Company has
the following powers in the Company.

 Power to make calls in respect of money unpaid on shares


 Call meetings on suo moto basis.
 Issue shares, debentures, or any other instruments in respect of the
Company.
 Borrow and invest funds for the Company
 Approve Financial Statements and Board Report
 Approve bonus to employees
 Declare dividend in the Company
 Power to grant loans or give guarantee in respect of loans
 Authorize buy back of securities
 Approve Amalgamation/Merger/ Takeover
 Diversify the business of the Company
Duties of Directors
Board of Directors acts as agent of the Company. However while acting for
Company, Director needs to take care of his duties which are as follows:-

 To act in good faith


 Act in accordance with the Articles of Association of the Company
 To act so as to promote the objects of the Company
 Act in best interest of the Company and its stakeholders
 Exercise duties with due and reasonable care
 To exercise independent judgement
 Not to get involved in a situation where his interest conflicts with the
interest of the Company
 He cannot assign his office to any other person.
 Not to achieve undue gain or advantage

You might also like