Company Management-Directors by SUBHAYU DAS

8/9/2019 Company Management-Directors by SUBHAYU DAS

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Company

Management-Directors

SUBHAYU DAS

Project designed by Subhayu Das(IILM BS)KOL


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Agenda

Director-The word imply-

Responsibilities of a DIRECTOR

Boundaries for a Director & appointment

Rules & rights of company management

FACTORS which turn sour the FACT

Removal of Directors & casual vacancies

Limitation for a managing director

Disqualifications of a managing director


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Director-The word imply-As

general-

Managing Director is that person who design,

develop and implement the strategic plan for

their company in the most cost effective and

time efficient manner.

As laws point

of view-

A managing director, as defined in Section 2(26),

means a director who is encrusted with

substantial powers of management which wouldnot otherwise be exercisable by him. The

"substantial powers" of management may be

conferred upon him by virtue of an agreement

with the company


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Responsibilities of a DIRECTOR

A managing director occupies the dual capacity of being a director aswell as employee of the company, so responsibility turned double.

Play a leadership role for an organization and the MD may fulfill a

motivational role for the workforce in addition to an operational role in the

running of the businessMD should manage overall management of a company.

This includes the staff, the customers the budget,

the company's assets and all other company resources

to make the best use of them and increase thecompany's profitability.

MD reports to the Board of Directors on a weekly, monthly, annual or every

decade basis to keep them informed of how the company is doing.

N Chandrasekaran(Chief Executive Officer

and Managing Director

of TCS)

PERFECT

EXAMPLE WHO

PLAYS HIS ROLE


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Boundaries for a Director-

A managing director who was prosecuted for default

under S. 220 contended that he was not liable as he had

resigned before the last date for filing accounts

Procedure Of Appointment [S. 269]

The appointment and remuneration require approval of

shareholders in general meeting.

Application for approval must be made within 90 days.

If there is no approval, the appointee should vacate the office from the

date of the communication of the refusal to the company, failing which

he incurs a penalty of Rs 500 for every day of usurpation of the office


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Appointment of a MDOne man army-

No body corporate, association or firm shall be appointed director of acompany, and only an individual shall be so appointed.

Appointment of directors and proportion of those who are to retire by rotation

If the place of the retiring director is not so filled up and the meetinghas not expressly resolved not to fill the vacancy, the meeting shall stand

adjourned till the same day in the next week, at the same time and place,

or if that day is a public holiday, till the next succeeding day which is not

a public holiday, at the same time and place.

In default of and subject to any regulations in the articles of a company,

subscribers of the memorandum who are individuals, shall be deemed to be thedirectors of the company, until the directors are duly appointed in accordance

with section 255

Restrictions on appointment or advertisement of director


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Rules & rights of company managementRules & rights of company management

Right of company to increase or reduce the number of directors-

Subject to the provisions of sections 252, 255 and 259, a company in

general meeting may, by ordinary resolution, increase or reduce the

number of its directors .

Company give right to persons other than retiring directors to stand

for directorship

Minimum number of directors-

[Provided those public company having,-

(a) a paid-up capital of five cr rupees or more;

(b) one thousand or more small shareholders,-Those company should have least THREE DIRECTORS.

Small shareholders" means a shareholder holding shares of

nominal value of twenty thousand rupees those company

should have two director.


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The person not to be appointed as managing director-

1.Who is an undischarged insolvent,or has at any time been adjudged an

insolvent.

2.A suspends or any time suspended

3.Who is convicted by a court of an offence involving moral turpitude.

The managing director is required by the articles of the company to hold a specified

share qualification & who is not already qualified in that respect, to obtain

qualification within two months after his appointment as director

BUT

After expiry of two months he does not hold the qualification then he shall be

punishable with Rs.50 for every day between such expiry & the last day on which he

acted as a director.


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REMOVAL OF DIRECTORS(SEC 284)A company may be removed a director (not being a director appointed

by the Central government in pursuance of sec408)before the expiryof his Period of office.

Special notice shall be required of any resolution to remove a director under this section, or to

appoint somebody instead of a director so removed at the meeting at which he is removed

On receipt of notice of a resolution to remove a director under this section, the company shall

forthwith send a copy thereof to the director concerned, and the director (whether or not he is a

member of the company) shall be entitled to be heard on the resolution at the meeting.

Positively send a copy of representations to every member

Of the company to whom notice of the meeting is sent


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Steps of removal of Director(cont..)

U/s 284 the procedure is as below :

1. Members have to object on the director and to call the AGM/EGM for the removal of the said

director.

2. Company have to send the copy of objection letter of members to the director.

3. The director (who required to be removed) may submit his representation in the EGM.

4. The EGM to be called and director may be removed with majority.

5. Form-32 to be filed along with the resolution passed in EGM.

6. Copy of form-32 along with the EGM resolution result to be intimated to the

. director removed.


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Limitation for a managing

directorAs per sec 317 no company appoint or employ any individual as its

managing director for a term exceeding five years at a time.

No director of a company shall hold any office or place of profit.

After the commencement of sec 275 no person shall hold office at the same time as director

in more than twenty companies.

In case of every company, a meeting of its Board Directors Shall be held at

least once in every three months & at least four such meetings shall be held

in every year.

No directors of a company participate or vote in Boards proceedings.


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Casual vacanciesIn private company where a director appointed in general meeting

Is vacated before his term of office will expire in the normal courseThe resulting casual vacancy may in default of and subject to any

regulations in the articles of the company, be filled by the Board of directors

at the meeting of the Board.

Any person so appointed shall hold office only up to the date up to whichthe director in whose place he is appointed would have held office if it had

not been vacated as aforesaid.

Vacation of office by directorsIf the MD is found to be of unsound mind by a court ofCompetent jurisdiction.

If he is adjudged an insolvent

If he absent himself from three consecutive meeting of the

Board of Directors.


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As per sec 260, Board ofDirectors can appoint additional Director.

BUT, that such additional directors shall hold office only

Up to the date of the next annual general meeting of the company.

REMUNERATION OF DIRECTORS-

A director who is either in the whole-time employment of the

Company or a managing director may be paid remuneration eitherby way of a monthly payment or at a specified percentage

of that net profits of the company or partly by one way and

partly by the order.


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Disqualifications of a managing

director

Potential causes of disqualification include:

1. Allowing the company to trade while insolvent2. Not keeping proper accounting records

3. Failing to prepare and file accounts

4. Not sending returns to Companies House

5. Failing to send tax returns and pay tax

6. Convicted by Court in any moral turpitude

Ignoring a disqualification order is a criminal offence. You could be fined and sent to

prison for up to two years.

Even if anyone have not been disqualified, rules introduced on 6 August 2007 may

prevent you from becoming a director of another company. The rules prohibit directors

of insolvent companies from becoming the director of another company with the same

or a similar name (known as a 'prohibited name') for 12 months. The rules also

prohibit directors of insolvent companies from acting in a way to promote, form or

manage a company with a prohibited name.


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ACKNOWLEDGEMENT

Through all the view points of the survey there have been many book

which give information to prepare this project work. Google search &

internet has helped a lot. I would like to thank Mr. Anindya Sen and all

other books to prepare my project efficiently and effectively.


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BIBLIOGRAPHY

Robert Gogans book Apartment living in Irerland.

Internet Articles

Books-

1. Wadhwas COMPANY ACT2. Marchentile Law by N.D Kapoor


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Company Management-Directors by SUBHAYU DAS

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