Different types of directors in a Private Limited Company

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Different types of directors in a Private Limited Company

Their job is to see that the company does not function in a manner detrimental to the interest of the stakeholders they represent. Unless the company’s Articles of Association mandate it, Private Companies are not required by law to select rotational directors. If the AOA (Article Of Association) is silent, the shareholders nominate directors in a general meeting.

Subject to the provisions of the Articles of Association, the Board may nominate a Nominee director. Non-executive directors (of NEDs) do not run the business day-to-day and normally only work part-time. They generally attend Board meetings and provide independent oversight of the company’s strategy, ethics, and integrity. Non-executive directors’ duties generally include acting in the interest of company stakeholders and monitoring the executive directors (eg by analysing their performance and determining how much they should be paid). Aside from executive and non-executive directors, there are other categories into which company directors may fall.

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This article provides insights into the different types of directors as defined by the Companies Act, 2013, and elucidates their multifaceted roles within an organization. Sometimes, departmental heads are called directors (eg Director of Communications) even though their roles is not technically a company director role. Confusingly, if such individuals have not separately been appointed to the Board (ie appointed as a company director), they do not have the legal rights and duties of a company director.

  • Appointed by small shareholders, these directors represent their interests in a listed company.
  • By approving a board resolution or a resolution by circulation, an additional director is appointed during a board meeting.
  • The registered office is where the company will conduct its main affairs and keep all the company documents.
  • He or she is a non-working director who is not involved in the day-to-day operations of the organization.

The women director can be appointed during the time of registration of the Company or after the incorporation of the Company by the Board of Directors and the shareholders. The time limit for an appointment – The existing Companies (i.e. old companies under the previous Companies Act, 1956) shall appoint women https://personal-accounting.org/types-of-directors-in-a-private-limited-company/ directors within 1 (one) year from their commencement. The new Companies (i.e. under the new Companies Act, 2013) have to appoint women directors within 6 (six) months from the date of their incorporation. If this provision is violated then it is punishable under Section 172 of the Companies Act, 2013.

Types Of Director in Private Limited Company.

In case of rejection of the name, the company has to file another SPICe+ form with the prescribed fee. It is mandatory for a person proposing to be a director in a company to obtain a DIN. One DIN is sufficient to act as a director in any number of companies.


In this article, Akriti Shikha pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses duties and responsibilities of a Director of a Private Limited Company. Section 2(59) of the Companies Act, 2013 defines “officer” which is similar to a Shadow Director. It means “any person under whose directions or instructions the Board of Directors or any one or more of the Directors are accustomed to act”.

Director in a Private Limited Company

Thereafter he shall intimate about his choice to concerned companies as well as concerned Registrar. Thus, the alternate director exercises his duties for a limited time only i.e. only till the time the principal director returns to his duties. In other words, alternate directors are appointed by the Board as a replacement for a director who is going to be away from India and is unable to attend board meetings. Even though a director can be present through video conferencing,  at times the shareholders might find the need to have a physical presence on the Board, which is when   an alternate director gets appointed.

They should be able to fulfil all their duties while the principal director is away. A de facto director has the same responsibilities toward the company as a regular director. Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP.

Small Shareholders Directors

Provisions of Section 161(2) of the Companies Act, 2013 deal with Alternate directors. When a director of a company is not in India for more than (3) three months then an alternate director can be appointed on the original director’s behalf. An alternate or an alternative director acts on behalf of the director who is not in the office due to being away for more than 3 months.

Managing directors are sometimes appointed to lead the implementation of the Board’s strategy. These are statutory directors who have been formally appointed to act as directors in accordance with the Companies Act 2006 and the company’s Articles of association. Nominee directors represent the interests of stakeholders or stakeholder groups (nominators) on a company’s board.

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