Types of Directors
Following are the
categories of directors who constitute ‘Board’ of a Company:
1) Ordinary
directors: Ordinary directors are also referred to as simple director who
attend board meeting of a company and participate in the matters put before the
board. These directors are neither whole time directors nor managing directors.
2) Managing
Director: According to Sec.2 (54)
of the Indian Companies Act “managing director” means a director who, by virtue
of the articles of a company or an agreement with the company or a resolution
passed in its general meeting, or by its Board of Directors, is entrusted with
substantial powers of management of the affairs of the company and includes a
director occupying the position of managing director, by whatever name called.
3) Whole-time
directors: A whole-time executive director includes a director in the
whole-time employment of the company.
4) Alternate
director: The Board Meeting may be held at a time when a director is, absent
for a period of more than three months from the state and in such a situation,
an ‘alternate director’ is appointed. The Board of Directors can appoint the
additional director in the absence of a director if so authorized by articles
or by a resolution passed by the company in general meeting. The alternate
director shall work until the original director return or up to the period
permitted to the original director.
5) Professional
Directors: Any director possessing professional qualifications and do not have
any pecuniary interest in the company are called as “professional directors”.
6) Independent
directors: Sec. 2(47) defines independent directors to mean an independent
director referred to in Sec. 149(5).
7) Nominee
Directors: The banks and financial institutions which grants loans to a company
generally impose a condition as to appointment of their representative on the board
of the concerned company. These nominated persons are called as nominee
directors.
Qualifications of a Director:
As regards to the qualification of directors,
there is no direct provision in the Companies Act, 2013.But, according to the
different provisions relating to the directors; the following qualifications
may be mentioned:
1. A director must be a person of sound mind.
2. A director must hold share qualification,
if the article of association provides such.
3. A director must be an individual.
4. A director should be a solvent person.
5. A director should not be convicted by the
Court for any offence, etc.
Disqualifications
of a director:
Section 164 of Companies Act, 2013, has
mentioned the disqualification as mentioned below:
1) A person shall not be capable of being
appointed director of a company, if the director is
(a) Of unsound mind by a court of competent
jurisdiction and the finding is in force;
(b) An undischarged insolvent;
(c) Has applied to be adjudicated as an
insolvent and his application is pending;
(d) Has been convicted by a court of any
offence involving moral turpitude and sentenced in respect thereof to
imprisonment for not less than six months and a period of five years has not
elapsed from the date of expiry of the sentence;
(e) Has not paid any call in respect of shares
of the company held by him, whether alone or jointly with others, and six
months have elapsed from the last day fixed for the payment of the call; or
(f) An order disqualifying him for appointment
as director has been passed by a court in pursuance of section 203 and is in
force, unless the leave of the court has been obtained for his appointment in
pursuance of that section;
2) Such person is already a director of a
public company which:
(a) Has not filed the annual accounts and
annual returns for any continuous three financial years commencing on and after
the first day of April, 1999; or
(b) Has failed to repay its deposits or
interest thereon on due date or redeem its debentures on due date or pay
dividend and such failure continues for one year or more:
Provided that such person shall not be
eligible to be appointed as a director of any other public company for a period
of five years from the date on which such public company, in which he is a
director, failed to file annual accounts and annual returns under sub-clause
(A) or has failed to repay its deposit or interest or redeem its debentures on
due date or paid dividend referred to in clause (B).
