Company is a legal entity, it has physical existence, and it can act through a natural person

only. The Company hires professionals to direct its affairs, and they are called directors, so
the directors are the persons who act on behalf of the Company. The Company deals with the
appointment, removal, qualification and disqualification of directors.

Section 2 define director as includes any person occupying the position of director by
whatever name called and shall include a shadow director;1

The public Company should have a minimum of three directors while a private company
should have at least a minimum of two directors, and for One Person Company, only one
Director is required2

Classification Of Directors

The followings are the types of directors who are part of a company:

 Ordinary Director

Such Director is also known as a Simple Director. They attend every board meeting and
participate in the matters put before in the same. They are neither whole time directors nor
the managing Director.

 Managing Director

The directors may from time to time appoint one or more of their fellow directors body to the
office of managing director for such period and on such terms as they think fit, and, subject to
the terms of any agreement entered into in any particular case, may revoke the appointment
also, A director appointed under sub regulation (1) shall not, while holding that office, be
subject to retirement by rotation or be taken into account in determining the rotation of
retirement of directors, but his or her appointment shall be automatically determined if he or
she ceases from any cause to be a director3.

 Nominee Director

Those who are nominated by the Company for grant of loans by the financial institutions,
banks or government are called Nominee directors.4

1
Section 2 of the companies act
2
Section 185 of the companies act
3
Section 107 of the companies Act
4
Section 186(2) of the companies act
The nominee director shall—(a)manage the affairs of the company in case of death of the
single member until the transfer of shares to legal heirs of the single member;(b)inform
the registrar of the death of the single member, provide particulars of the legal heirs and in
case of any impediment report the circumstances seeking directions within fifteen days after
the death of the single member;(c)transfer the shares to the legal heirs of the single member;
and(d)call the general meeting of the members to elect directors.

Qualification And Disqualification of Directors

The Companies Act, has given provisions regarding the eligibility of a director under section
1645, but the qualifications required to be a director are not given under the Act. But the
companies mention the qualification of directors in their AOA. The qualification and
disqualification of directors can also be taken out from other provisions of the Act.

Qualifications Of Directors

Without prejudice to the restrictions imposed by section 1936, it shall be the duty of every
director who is by the articles of the company required to hold a specified share qualification
and who is not already qualified, to obtain his or her qualification within two months after his
or her appointment or such shorter time as may be fixed by the articles.

(2) For the purpose of any provision in the articles requiring a director or manager to hold a
specified share qualification, the bearer of a share warrants shall not be taken to be the holder
of the shares specified in the warrant.

(3) The office of director of a company shall be vacated if the director does not within such
shorter time as may be fixed by the articles, obtain his or her qualification or if after the
expiration of that period or shorter time he or she ceases at any time to hold his or her
qualification.

(4) A person vacating office under this section shall be incapable of being re-
appointed director of the company until he or she has obtained his or her qualification.

(5) Where after the expiration of the period or shorter time any unqualified person acts as
a director of the company, he or she commits an offence and is liable on conviction to a fine
not exceeding fifty currency points for every day between the expiration of the period or
5
Section 164 of the companies act
6
Section 193 of the companies act
shorter time or the day on which he or she ceased to be qualified as the case may be and the
last day on which it is proved that he or she acted as a director.

Disqualification of directors

Section 199 of the companies act highlights a number of ways in which a director can be
disqualified as discussed below;7

(1)A person shall be disqualified from acting as a director for a period of three years if he or
she fails to (a)keep proper accounting records;(b) prepare and file accounts;(c) send returns to
registrar;(d) file tax returns and pay tax; or(r)allows a company to trade while insolvent.

(2)A person disqualified as a director shall not (a)be a director of any company;(b) act as a
director before the expiry of the disqualification period;(c) influence the running of a
company through the directors;(d) be involved in the formation of a new company;(e) act in a
way that promotes a company;

Removal Of Directors

1) A company may by ordinary resolution remove a director before the expiration of his or
her period of office, notwithstanding anything in its articles or in any agreement between
the company and the director but this subsection shall not in the case of a private
company authorise the removal of a director holding office for life at the commencement of
this Act whether or not subject to retirement under an age-limited by virtue of the articles or
otherwise.

(2) Special notice shall be required of any resolution to remove a director under this section
or to appoint somebody instead of a director so removed at the meeting at which he or she is
removed.

(3) On receipt of notice of an intended resolution to remove a director under this section
the company shall send a copy of the notice to the director concerned and
the director whether or not he or she is a member of the company shall be entitled to be heard
on the resolution at the meeting.

(4) Where notice is given of an intended resolution to remove a director under this section
and the director concerned makes with respect to it representations in writing to
the company in respect of the intended resolution and requests their notification to members

7
Section 199 of the companies
of the company, the company shall as soon as practicable—(a)in any notice of the resolution
given to members of the company state the fact of the representation having been made;
and(b)send a copy of the representations to every member of the company to whom notice of
the meeting is sent whether before or after receipt of the representations by the company.

(5) Where a copy of the representations is not sent as required by subsection (3) because it
was received too late or because of the company’s default, the director may without prejudice
to his or her right to be heard orally require that the representations shall be read out at the
meeting, except that copies of the representations need not be sent out and the representation
need not be read out at the meeting if, on the application either of the company or of any
other person who claims to be aggrieved, the court is satisfied that the rights conferred by this
section are being abused to secure needless publicity for defamatory matter.

(6) The court may in the circumstances described in subsection (5) order the company’s costs
on an application under this section to be paid in whole or in part by the director,
notwithstanding that he or she is not a party to the application.

(7) A vacancy created by the removal of a director under this section, if not filled at the
meeting at which the director is removed, may be filled as a casual vacancy.

(8) A person appointed director in place of a person removed under this section shall be
treated, for the purpose of determining the time at which he or she or any other director is to
retire as if he or she had become director on the day on which the person in whose place he or
she is appointed was last appointed a director.

(9) This section does not deprive a person removed under this section of compensation or
damages payable to him or her in respect of the termination of his or her appointment
as director or of any appointment terminating with that as director or as derogating from any
power to remove a director which may exist apart from this section.

Conclusion

The directors are an integral part of any company. There are certain responsibilities in the
Company which only a director can perform. The Act dealing with matters related to
directors is The Companies Act, 2012. Shareholders of the Company appoint these directors,
and the qualification and disqualification of directors are mentioned in the AOA of the
Company. A strict bar of five years is given to allow a person of appropriate qualification to
represent the Company. However, a provision of appeal is also given in the Company Law
along with thirty days remedial period to rectify any filing error.