Section 2(34) of the Companies Act, 2013 defines a ‘director’ means director appointed to board of company. The definition is not exhaustive. It suggest only person who is appointed as director on board is regarded as director of company.
Body corporate, an association, Limited liability partnership (LLP) or a firm cannot be appointed as director of a company. Only an individual who has obtained Director Identification Number (DIN) can be appointed as director. Foreign national or NRI can be appointed as director.There is no age limit for appointment of director but minor cannot be appointed as director.
Director are person responsible for running Private Limited Company operations. They Act on behalf of company of day to day activities. Directors get appointed by Board of company. Maximum 15 directors can be appointed in company. It is necessary to understand various types of director. In this article we discussing about types of Director in Private Limited company.
|S.No.||Types of Director||Explanation|
|1||Executive Director||Who is in whole time employment|
|2||Non-executive Director||who is not holding any executive post|
|3||Professional Director||Professional’s Like CA , Doctor etc.|
|4||Resident Director||Styed in India > 182 Days|
|5||Shadow Director||who is not appointed to the Board|
|6||First Director||Name is mention in Articles of Association|
|7||Rotational Director||Appointed as per Law|
|8||Additional Director||Get appointed in AGM|
|9||Alternate Director||director for a temporary period|
|10||Nominee Director||third parties appoint them|
Managing director in company have ability to make decision. A Public Company or a subsidiary of a Public Company that has a share capital of more than Five Crore rupees must have a Managing Director.
Directors who are in whole time employment or entrusted with day-to-day affairs of company are termed as executive directors.
Directors who are not holding any executive post are known as non-executive directors. Non-executive directors are from outside the company. They do not have knowledge about day-to-day affairs of the company.
Professional directors are expert persons in various fields and appointed by company as non-executive directors. They offer an advice to board in which they are expert.
Every company is required to have at least one director who has stayed in India for a period of not less than 182 days in the previous calendar year. [Section 149(3)]
A person, who is not appointed to the Board, but on whose directions the board is accustomed to act, is liable as a director of the company, unless he or she is giving advice in his or her professional capacity.
Articles of Association contains the name of first directors. As per Regulation 60 of Table F of companies act, 2013 in the name of first directors are determined in writing by subscriber to the memorandum or majority of them. [Section 152]
It is not compulsory under the law for private company to appoint rotational directors unless the Articles of Association of the company so require. If the Article is silent, directors are appointed in general meeting by the shareholders.
The additional director is appointed at board meeting by passing board resolution or by passing a resolution by circulation. Additional director can be, if board is unable to appoint. Additional directors can hold office only up to the date of the next annual general meeting of the company. If AGM is not held, the director is deemed to vacate the office on last day on which general meeting should have been held. A person who fails to be a director cannot be appointed as an additional director. [Section 161(1)]
Alternate director is one of type of director in Private Limited company. If any director is absent or on leave for a period of 3 or more months from India, company may appoint any other person as director in his place. Such a director is known as Alternate director. He can be appointed if it is authorized by articles or by passing a resolution at general meeting.
Person shall not be appointed as alternate director for an independent director unless he is qualified to be appointed as independent director under companies act, 2013.The person appointed as alternate director shall not hold any alternate directorship for any other director in the company.
An alternate director vacates his office where- original directors returns to India, tenure of original director is over, original director dies, original director vacates his office or original director resigns from his office etc. [Section 161(2)]
Board of directors can appoint director nominated by any financial institution, central or state government, banks, certain shareholders, third parties through contracts or any other person who recovers his interest. Nominee director is appointed pursuant to any loan agreement or government shareholding in government Company. Board may appoint Nominee director subject to provisions in its articles of association.[Section 161(3)]
Number of directors is defined under section 149(1) of companies act, 2013.
Minimum number: Every private company shall have at least 2 directors.
Maximum number: A company can appoint maximum 15 directors. A company may appoint more than 15 directors after passing a special resolution in general meeting and approval of central government is not required.