Chapter: 8 Directors: Powers, Duties & Liabilities

Directors: Powers, Duties & Liabilities

Introduction

Company is a legal person and therefore it is necessary that the company's business should be entrusted to the human agents, to carry and conduct its day-to-day affairs. Hence there is necessity of directors who can perform functions on behalf of the Company.

Under Section 252(1), every public company shall have at lease three directors provided that a public company having a paid up capital of Rs. 5 crore or more and 1000 or smaller shareholders shall have a director elected by such small shareholders. Every private company shall have at least two directors.

Directors are collectively referred in the Act as a Board of Directors or the Board. The management of the company is normally vested in the Board of Directors that is usually given all the powers except those that are to be exercised by the shareholder in a general meeting.