Directors: Jaiib Paper 3 (Module D), Unit 22
As we all know that is Directors for JAIIB Exam. JAIIB exam conducted twice in a year. So, here we are Directors (Unit-22), Commercial Laws with Reference to Banking Operations (Module D), Legal & Regulatory Aspects of Banking -Paper 3.
- The management of the company needs to be entrusted with a professional body, i.e., the board of directors.
- The ownership and management of the company is thus bifurcated.
- The board of directors control the day-to-day working and management of the company as well the long-term strategic planning of the company.
Minimum Number of Director
SECTION 149(1) OF COMPANIES ACT, 2013
Every company shall have a Board of Directors consisting of INDIVIDUALS as directors and shall have—
- A minimum number of three 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; and
- a maximum of fifteen directors:
- Provided that a company may appoint more than fifteen directors after passing a special resolution
Section 149(1)(b) and first proviso to section 149(1) does not apply to Government Company and section 149(1) and first proviso does not apply to Section 8 Companies (see notification 463E and 466E respectively).
Private Company ((Sec. 2(68)of ICA 2013) vs Public Company (Sec 2(71) 2013)
|Point||Private Company||Public Company|
|Paid-up Capital||Minimum paid-up capital of Rs 1,00,000/-||Minimum paid-up capital of Rs 500,000/-|
|No. of Members||Minimum 2 members and maximum 200||Minimum 7 members, no max limit|
|Name of Company||Name must end in “private limited”||Name must end in “public limited”|
|No. of Directors||Minimum two directors, and no need for independent directors||Minimum 3 directors, and if listed company one-third must be independent|
|Managerial Remuneration||There are no restrictions||Restricted to 11% of the Net profit of the company|
|Quorum of Meetings||Minimum two members, present in person||Quorum will depend on the total number of members of the company|
|Public offer||Private companies cannot have public offers for shares||Public offers must be in the demat form only|
|Accepting Deposits||Not allowed according to the act||If paid capital exceeds 100 crores, or turnover exceeds 500 crores, the company can accept public deposits|
Appointment of Directors and proportion of those who to Retire By Rotation
Unless the articles provide for the retirement of all directors at every annual general meeting, at least two-thirds of the total number of directors of a public company, or of a private company which is a subsidiary of a public company, have to be
- Persons whose period of office is liable to determination by retirement by rotation;
- Appointment by the company in general meeting.
- The board of directors can appoint directors by passing a resolution if such a power exists in the articles. Such directors are known as additional directors and they hold office only up to the date of the next annual general meeting of the company.
Vacation of office by Directors
- In terms of Section 167 of Indian Companies Act, 2013 the office of a director shall become vacant in case:
- He incurs any of the disqualifications as specified in Section 164.
- He absents himself from all the meeting of the Board of directors held during a period of 12 Months with or without seeking leave of absence of the Board;
- He acts in contravention of the Provisions of Section 184 relating to entering into contracts or arrangements in which he directly or indirectly interested;
- He fails to disclose his interest in any contract or arrangement in which he directly or Indirectly interested, in contravention of the provisions of Section 184.
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