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Query: What are the different types of directors?

Category: Corporate Law

Answer: A company can have different types of directors such as: Managing Director: A 'Managing Director' refers to a Director who, by a resolution passed at its annual general meeting, or by its Board of Directors or by the virtue of the Articles of Association of the company or by an agreement with the company or, is entrusted with the substantial powers of the management of the affairs of the company. Whole-time Director: A Whole-time Director is one who is in full-time employment of the company. Executive Director: An Executive Director is also one who is in full-time employment of the company. He can be a whole time director or Managing Director. Ordinary Director: An 'Ordinary Director' refers to a Director who participates in the matters that are put before the Board of Directors and attends the Board meetings of a company. These Directors are neither the Whole-time Directors, Executive Directors or Managing Directors. Independent Director: An independent director in relation to a company, means a director other than a Whole Time Director, Managing Director, Or Nominee Director. The following companies have to appoint at least two independent directors: A. Public Companies having Paid up Share Capital of Rs.10 Crores or More; B. Public Companies having Turnover of Rs.100 Crores or More; C. Public Companies have total outstanding loans, debenture and deposits of Rs. 50 Crores or More. Additional Directors: Any Individual can be appointed as Additional Directors by a company under section 161(1) of the New Act. Alternate Directors: As per Section 161(2) A company May appoint, if the articles confer such power on company or a resolution is passed (if an Director is absent from India for atleast three months). • An alternate Director cannot hold the office longer than the term of the Director in whose place he has been appointed. • Additionally, he will have to vacate the office, if and when the original Director returns to India. • Any alteration in the term of office made during the absence of the original Director will apply to the original Director and not to the Alternate Director. Shadow Director: A person, who is not appointed to the Board, but on whose directions the Board is accustomed to act, is liable as a Director of the company, unless he or she is giving advice in his or her professional capacity. Nominee Directors: They can be appointed by certain shareholders, third parties through contracts, lending public financial institutions or banks, or by the Central Government in case of oppression or mismanagement.

Date Posted 26-Dec-2019
Posted By Divya Sharma
Views: 540

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