MANAGEMENT OF A COMPANY

BY:- AQIB KHAN

DEFINATION1. “DIRECTOR” means a director appointed to the Board of

a Company. 2(34)

2. “BOARD OF DIRECTORS” or “BOARD”, in relation to a company, means the collective body of the directors of the Company. 2(1)(10)

NUMBERS OF DIRECTORPUBLIC COMPANY PRIVATE COMPANY

MINIMUM NUMBER

MAXIMUM NUMBER

MINUMUM NUMBER

MINUMUM NUMBER

One Person Company

COMPOSITION OF DIRECTOR

Resident director - Every company shall have at least one Director who has stayed in India for a total period of not less than 182 days in the previous calendar year

Small ShareHolder Director - A listed company may have one director elected by small share holder

COMPOSITION OF DIRECTOR

INDEPENDENT DIRECTOR Every listed public company shall have at least one-third of

the total number of directors as independent directors

Central Government may prescribe the minimum number of independent directors

Independent Director not to be included in the - total number of directors

INDEPENDENT DIRECTORAn Independent director is a director

(member) of a board of directors who does not have a material or pecuniary relationship with company or related persons, except sitting fees

An Independent Director shall hold office for a term up to five consecutive years on the Board of a company

WOMEN DIRECTOR Listed and prescribed class of companies to have at least 1

woman director

Following class of companies shall appoint at least 1 woman director:

Listed company within 1 year of the commencement of provisions

Every other public companies-

with paid-up capital of ` 100 crores or more; or;

Turnover of ` 300 crores or more

APPOINTMENT OF DIRECTORSFirst Director - The subscribers to the memorandum who

are individuals shall be deemed to be the first directors of the company

Every director shall be appointed by the company in general meeting

No person shall be appointed as a director of a company unless he has been allotted the Director Identification Number

• Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed. Sec 154

• A person who is intended to become a director must apply to the Registrar for obtaining a Director Identification Number (DIN) in Form No DIR-3. The prospective director should give a declaration to the company that he holds a DIN and is not otherwise disqualified to become a director. A person who has been appointed as a director must notify the company about his consent to act as director in Form No DIR-2 and to the Registrar within thirty days of appointment in Form No DIR-12.

• No individual, who has already been allotted a Director Identification Number under section 154, shall apply for, obtain or possess another Director Identification Number

APPOINTMENT OF DIRECTORS

Additional Director

Alternate Director

Nominee Director

Casual Vacancy

• The articles of a company may confer on its Board of Directors the power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an additional director at any time.

• An additional director shall hold office up to the date of the next AGM or the last date on which the AGM should have been held, whichever is earlier.

Additional Director:-

Alternate Director:

The Board of Directors of a company may, if so authorised by its articles or by a resolution passed by the company in general meeting, appoint a person, not being a person holding any alternate directorship for any other director in the company, to act as an alternate director for a director during his absence for a period of not less than 3 months from.

NOMINEE DIRECTOR?

An individual who is given the role of a non executive director on the firm’s board of directors, in place of another person, investor or financial institution

Directors in causal vacancy: If any vacancy is caused by death or resignation of a director appointed by the shareholders in General meeting, before expiry of his term, the Board of directors can appoint a director to fill up such vacancy. The appointed director shall hold office only up to the term of the director in whose place he is appointed.

DISQUALIFICATIONS FOR APPOINTMENT OF DIRECTOR: SEC 164

• A person shall not be eligible for appointment as a director of a company, if :-

(a) he is of unsound mind and stands so declared by a competent court;

(b) he is an undischarged insolvent;

(c) he has applied to be adjudicated as an insolvent and his application is pending;

(d) he has been convicted by a court of any offence

VACATION OF OFFICE OF DIRECTOR: SEC 167

1) the office of a director shall become vacant in case -

He incurs any of the disqualifications specified in section 164;

He absents himself from all the meetings of the board of directors held during a period of twelve months

He becomes disqualified by an order of a court or the tribunal

2) If a person, functions as a director even when he knows that the office of director held by him has become vacant, he shall be punishable

3) The Central Government shall appoint the required number of directors who shall hold office till the directors are appointed by the company in the general meeting

RESIGNATION OF DIRECTOR: SEC 168

A director may resign from his office by giving a notice in writing to the company

Director shall also forward a copy of his resignation to the registrar

The Central Government shall appoint the required number of directors who shall hold office

RIGHT OF PERSONS TO STAND FOR DIRECTORSHIP

A person who is not a retiring director

The notice must be sent at the registered office of the company, not less than 14 days before the meeting

Along with the deposit of one lakh rupees

NUMBER OF DIRECTORSHIPS

Public Companies

Overall

KEY MANAGERIAL PERSONNEL

Not exceed 11% of net profit of the company

To MD or WTD or MANAGER

IF there is One MD or

WTD or MANAGERMaximum 5% of

net profit

If there is MORE

THEN ONE MD or WTD

or MANAGERMaximu

m 10% of net profit

To Other DirectorWhere

there is NO MD or WTD

or MANAGERMaximum 3% of

net profit

Where there is MD or WTD or MANAGERMaximum 1% of

net profit

TOTAL MANGERIAL REMUNERATION PAYABLE

THANK YOU