Who is the director?
A director of a Company is a person who is appointed to a limited Company that looks after the day-to-day business activities and finances of the Company. He is selected from a group of managers who leads or supervises a particular area of a Company. The comPANies which use this term of ‘director’, in general, have many directors who hold different responsibilities and are spread throughout different business roles.
He ensures all the statutory filing such that the obligations are met. A director has a huge responsibility as his decisions would help in deciding the benefit of the Company as a whole. Thus it is important for a director to be honest and act lawfully and wisely.
Types of Directors
There are various types of directors and are categorized as:
Managing Director – Empowered with an overall charge for running the Company.
Executive Director/ Whole Time Director – Looks after the day to day working of the Company.
Non-Executive Director – They are the ones who are not involved in day to day working and decision making.
Nominee Director – They are appointed by the PE/VC investors/banks who have advanced loans or are shareholders in the case of a listed Company to represent their interests.
Independent Director – Their job is just to guide the Company and look after the betterment of the Company. They do not have any pecuniary relationship with the Company. The independent director is defined under Regulation 16 (1)(b) of the LODR Regulation.
Of all kinds of directors, the Managing Director and Whole Time Director are more responsible for running the Company.
Directors for different forms of comPANies
Every single Company has to have a certain number of directors in the Company who constitute the Board as per the provisions of ComPANies Act, 2013. There are different criteria that decide the number of directors a Company would have and this is prescribed in the laws. For example:
A private Limited Company shall consist of a minimum of 2 directors
A Public Limited Company has to have a minimum of 3 directors
An OPC should consist of at least 1 director.
There can be a maximum of 15 directors in total for any Company. If a Company wants to have more than 15 directors, then there has to be an approval under the law. Also, every Company should have one Resident Director, a person who has lived a minimum of 182 days in India in the previous calendar year.
Under section 152 of ComPANies Act, 2013 and Rule 8 of the ComPANies Rule (Appointment and Qualification of Directors), 2014, the appointment of the director has been mentioned.