With respect to trust laws in India, a trustee has legal ownership of the trust whose equitable ownership belongs to the beneficiary. In light of this declaration, the directors will not be deemed to be full trustees of the Corporation. Unlike a trustee, the assets of the corporation are not legally with him. In addition, a trustee executes trust contracts in his or her own name, while directors do the same under the common seal of the corporation and not in his or her personal capacity. Under section 149 of the Companies Act 2013, a maximum of 15 directors may be appointed. A director is a representative of the corporation for the conduct of its affairs. They have a fiduciary relationship with the company and shareholders when they act as representatives of a corporation. However, directors have independent powers in certain matters, unlike agents, who act primarily under the direction of the principal. As mentioned earlier, a company cannot act alone. It would always take someone to act on its behalf. A corporation can only act through directors, making it a principal and agent relationship. This relationship gives directors the authority to act and make decisions on behalf of the corporation. Any contract or transaction entered into on behalf of the Company will hold the Company liable and not the directors.
Directors are not liable, they only sign and conclude contracts on behalf of the company. In Kirlampudi Sugar Mills Ltd. v. G. Venkata Rao (2003) found that if the CEO of the company executes a promissory note and borrows money from outside for the use of the company, it cannot be said that he has borrowed money for himself. Even if the company does not pay the promised amount, the one who borrowed money as an agent of the company assumes no responsibility. In H.P. State Electricity Board v Shivalik Casting (P.) Ltd. [2003], it was concluded that if a director acts as guarantor in his personal capacity and not for and/or on behalf of the company, the corporation cannot be sued for the amount of the security. There were a number of circumstances in Vineet Kumar Mathur v.
Union of India (1996), in which the directors have been responsible – Executive directors are generally employees with specific powers conferred on them either by a decision of the board of directors or by virtue of their employment contract. Certain individuals are excluded from appointment as directors of a corporation. In some cases, they are not formally appointed directors of a corporation, but exercise the functions of directors, although they do not have the authority and right to act. “Directors are sometimes called agents, sometimes trustees and sometimes directors. But each of these expressions is not used as an exhaustive explanation of their powers and responsibilities, but as an indication of useful points of view from which they can be considered for the moment and for the particular purpose. Sometimes department heads are called directors (e.g., Director of Communications), although they are not statutory administrators. Confusingly, these persons who have not been appointed to the board do not have the legal rights and duties of a director prescribed by law. The company and the individual must be careful not to mislead other parties about the status of the person with the title. Under the Companies Act 2013, business leaders are required to perform various functions and responsibilities. The provisions of this Companies Act clearly define the powers, roles and conduct of the director in a corporation. Section 149 of the Companies Act also deals with certain legal requirements.
They are listed below: General managers are those who retain responsibility for the day-to-day running of the company. They are also commonly referred to as all directors of the Corporation. You can find CEOs in the roles of CMOs, CFOs, etc. A director may not, without the consent of the corporation, place himself in a situation where there is a conflict or possible conflict, directly or indirectly, between the duties he owes to the corporation and his personal interests or other obligations owed to a third party. This applies in particular to the exploitation of goods, information or opportunities and whether or not the company can take advantage of the property, information or opportunity. Promoters are people who start a business. They appoint certain people as directors of this company, who become known as the first directors of the company. The same applies to the term “first directors”.
Under section 164(1) of the Companies Act 2013, a person is not eligible for the position of director in a company if: No professional qualifications are required by the Companies Act. Unless otherwise stated in the company`s AOA, a director does not need to be a shareholder unless he or she voluntarily wishes to be a shareholder.
