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COMPANY MANAGEMENT  Appointment of Directors  Removal of Directors Shumeet K. Grewal.

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Presentation on theme: "COMPANY MANAGEMENT  Appointment of Directors  Removal of Directors Shumeet K. Grewal."— Presentation transcript:

1 COMPANY MANAGEMENT  Appointment of Directors  Removal of Directors Shumeet K. Grewal

2 A company being an artificial person cannot act by himself It must act through some human agency. The persons by whom the business of company is carried on are termed as directors. It is the statutory requirement of every company to have directors. The directors collectively are referred to as Board of Directors Shumeet K. Grewal

3 Only Individuals to be directors - No body corporate association or firm shall be appointed director of the company. Executive and Non – Executive directors – Executive directors are whole time employees of company associated with day to day working and receive remuneration – Non-Executive directors are not in employment of company. Instead of remuneration they receive sitting fee. Shumeet K. Grewal

4 Number of directors – Minimum -3 in case of Public Company and 2 in case of Private Company – Maximum – As fixed by Articles Restriction on number of directorships – No person can be a director in more than 15 companies Shumeet K. Grewal

5 Appointment of Directors Directors may be appointed in following ways – By the Articles – By Company at general meeting – By the principle of Proportional Representation – By the Board – By the third parties – By the Central Govt. – By the small shareholders – By the Tribunal in Sick Industries. Shumeet K. Grewal

6 By the Articles as regard first directors- – The first directors are usually named in Articles Appointment of directors at general meeting- – Except the first directors the subsequent directors are appointed by the company in general meeting – Not less than 2/3 rd of the total number of directors must be appointed by company in general meeting. Shumeet K. Grewal

7 Appointment of directors by proportional representation – Directors of a company are generally appointed by simple majority – As a result majority shareholders controlling 51% or more votes may elect all the directors Appointment by directors- the directors are empowered to appoint – Additional directors – Alternate directors – Directors filling casual vacancy Shumeet K. Grewal

8 Appointment by third party Appointment by Central Govt. Appointment by small shareholders-the company may – At its option appoint small shareholders director – It may act on the notice of not less than 1/10 th of total number of small shareholders – Such notice shall be given 14 days before meeting – It must be signed by 100 small shareholders Appointment of special director in case of sick Industrial company Shumeet K. Grewal

9 Removal of directors Director may be removed from his office – By the shareholders – By the Central Government – By the Tribunal Shumeet K. Grewal

10 Duties of directors Fiduciary Duty Duty of care and skill Duty to attend Board meetings Duty not to delegate Duty to disclose interest Statutory duties Shumeet K. Grewal

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