Meaning and Definition of Directors

Meaning and Definition of Directors

The person one who takes active interest in the well being of a company and one of the Members of Board of Directors is called as Director of a company. A Director is a person from a Board of Directors who leads or supervises the functioning of a company.

The Companies Act 2013 section 2 (34) defines a director appointed to the board of a Company is "A Person who is appointed or elected member of the Board of Directors of a company and has the responsibility of determining and implementing policies along with others in the board. It is not necessary to, hold any shares in the company or be an employee. Directors act on the basis of resolutions made in the Board of Directors meeting according to their powers stated in the Articles of Association of the company."

Minimum/Maximum Number of Directors in a Company-  Section 149(1) Section 149(1) of the Companies Act, 2013 requires that every company shall have a minimum number of 3 directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company. A company can appoint maximum 15 fifteen directors. A company may appoint more than fifteen directors after passing a special resolution in general meeting and approval of Central Government is not required.

A period of one year has been provided to enable the companies existing on or before the commencement of Companies Act, 2013 to comply with this requirement.

General duties are not mentioned in the Companies Act and therefore are not obligatory for the directors to perform. Some of them are mentioned below:

To act in good faith: The directors are expected to act in good faith i.e. they should always act in the best interest of the company. The directors should not make any secret profits.

To act with utmost care: The directors should conduct their work with utmost care. They should act with prudence.

Not to delegate work: The directors are supposed to perform all their work by themselves. They are not expected to delegate their work to anyone else.

However in the following cases the directors may choose to delegate the work to someone else:

If it is permitted in the Companies Act or in the Articles of Association.

If the directors cannot perform certain work that demands specialized expertise, such work can be delegated in such a case.