A Complete list of Directors in a Company

One of the most common business entities in India is the Private Limited Company. The Directors of a private limited company play an essential part during the process of incorporation and after the process of incorporation. In this blog, we will learn about the directors of a private limited company.

Directors in a Private Limited Company

As per the Companies Act, 2013, the word ‘director’ is defined as an individual who has been appointed to the Board of the Company. A group of individuals who are elected by the company’s shareholders which manages the company’s affairs, is known as the Board of Directors. This is because an agency of natural people is required to manage the company as it is an artificial legal person that is created by the law. The company mainly acts through the appointed directors and hence, the company’s management is entrusted to a group of people known as the ‘Board of Directors’.

We can also say that an individual who is responsible for the administration or controlling the company is known as the Director of a company. He is liable to supervise, control and manage the company and is appointed by the shareholders to direct the policies of the company.

A person can become the director in a private limited company if he possesses the DIN (Director Identification Number). Any individual can get a DIN number by visiting the DIN Cell if he/she is older than 18 years.

The Different Types of Directors

The various types of Directors in a company are listed below:

• Managing Director

A director who has been entrusted with a lot of powers to manage the affairs of the company either as a result of the AoA of the company or because of a resolution passed in the general meeting or by the Board of Directors or due to an agreement with the company.

• Executive Director

An executive director is also known as a whole-time director and he/she is in full time employment of the company.

• Ordinary Director

An ordinary director is a director of the company who attends all the Board Meetings of the company and engages in the matters discussed before the Board of Directors. These are neither Managing Directors nor whole-time directors.

• Additional Director

An individual who has been appointed as the director between two annual general meetings by the Board of Directors under the guidelines of the AoA of the company, is known as an Additional Director. An additional director is appointed only for the time period between two annual general meetings.

• Alternate Director

An individual who is appointed to act as the original director by the Board of Directors during his absence for more than 3 months is known as an alternate director.

• Professional Director

A director who has some professional qualifications and does not possess any sort of monetary interest in the company is referred to as a Professional Director. They are often appointed to the Board of Directors so that their expertise can be used to manage the company.

• Nominee Director

When banks and private equity investors grant a debt to the company or provide equity assistance to the company then they apply a condition. Under this condition, one of their representatives needs to be appointed to the Board of the respective company. These are known as nominee directors.

Number of Directors in a Company

It has been mandated by the law that only a living individual can be appointed as the director in a company and not a body corporate or a business entity. The maximum number of directors in a company can be 15 but this limit can be extended by passing a special resolution. And the minimum number of directors in a company are listed below:

1. For a private limited company: 2
2. For a limited company: 3
3. For a one person company: 1

Residency Requirement

There are no provisions in the Companies Act, 2013 that can prevent the appointment of a foreigner or a NRI as the director in a company. But, under Section 149(3), it is mandatory that at least one of the directors in the company should have resided in India for a time period of one hundred and eighty two days in the last calendar year.

Women Director in a Company

All those listed companies whose paid-up share capital is more than or equal to Rs. 100 Crore or a listed company whose turnover is more than or equal to Rs. 300 Crore, have to appoint at least one woman director mandatorily. However, no such requirement is mandated for a private limited company.

Conclusion

In this blog, we discussed in detail the director in a company, types of directors in a company, the number of directors: maximum and minimum, the Residency requirement for the directors in a company and the requirement for a women director in a company.