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Types of Directors

Types of Directors

Types of Directors


A company is an artificial person. For a company to carry out its day-to-day business it will need a living person who is in possession of a mind and hands and therefore capable of carrying out its actions.  The company can act only through such living persons. These living persons are the directors of a company. The Companies Act, 2013 does not precisely define a director. Sec 2 (34) of the Act states that “director” means a director appointed to the Board of a company. The board of a company comprises those people who carry out day-to-day business activities and manage the company. In short, the directors are the ones who look after the business of the company.  And that is why the role of a director is the most important role that determines the success of a company. 

Minimum and Maximum number of Directors in a Company

The law requires that every company must have:

 A company can have a maximum of 15 directors. The company could appoint more directors by passing the special resolution in its general meeting.

Types of Directors

Independent directors :

Independent directors are non-executive directors of a company and help the company to improve corporate credibility and enhance the governance standards. In other words, an Independent director is a non-executive director without a relationship with a company which might influence the independence of his judgment. The tenure of the Independent directors the hall up to 5 consecutive years; however, they shall be entitled to reappointment by passing a special resolution with the disclosure in the Board’s report.

Residential Director:

As per the law, every company needs to appoint a director who has been in India and stayed for not less than 182 days in a previous calendar year.

Managing Director:

Managing directors are primarily responsible for implementing company policy, mentoring the board, and serving as the company’s main representative. He/She is someone who is responsible for the daily operations of a company, organization, or corporate division.

Whole-time Director:

It means Director who is in employment or who devotes his whole time in the management of the Company business unlike non- executive director who may renders expert services to the Company. Whole time Director may get salary for his Service rendered if Board of Directors as well as by the Members approve the same.

Nominee Director:

A Nominee Director is a director in a company who has been appointed by financial institutions, banks or investors to form part of the Board of Directors. Appointment of nominee directors is governed by and subject to the provisions of the article of association of the company.

Alternate Director:

An alternate director is an individual who is appointed to attend a board meeting on behalf of the director of a company where the principal director would be otherwise unable to attend.

Responsibility of Director:

There are some responsibilities which board of directors has to play:
• determining the company’s strategic objectives and policies.
• monitoring progress towards achieving the objectives and policies.
• appointing senior management.
• accounting for the company’s activities to relevant parties, e.g. shareholders.

CS Shweta Sharma

CS Shweta Sharma having experience of three years under CS firm and also having degree of B. Com and M. Com. Having expert knowledge of ROC related work and other company related compliances with MCA.

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