Have a glimpse on Director, their powers and Managing Director.

1. Company
Organisation

2. Hello!
I am Sheik Fareeth
I am here because I going
to discuss about directors
and their powers
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3. Director – an Introduction

4. “Director means a
director appointed to
the board of a
company”
sec 2(34).
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5. Powers of Directors
� Statutory Powers of Directors
� Other powers
� Powers only with a resolution
� Managerial powers of Directors
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6. Statutory
Powers
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7. � The power to make call on shares in respect of unpaid money.
� The power to authorize lack of shares
� The power to issue debentures, whether in or outside india.
� The power to invest in funds
� The power to borrow money otherwise than on debentures
� The power to make loans or give guarantee in respect of loans.
But a banking company does not require any resolution by the
board.
� The power to approve the financial statement and board’s report.
� The power to diversify the business of the company.
� The power to approve amalgamation, merger or reconstruction.
� The power to take over a company or acquire a company or
substantial stake in another company.
List of Statutuory powers
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8. Other
Powers
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9. � Power to fill casual vacancy 9sec 161)
� Power to appoint the first auditor of the company
� Power to make political contribution.
� Power to appoint alternate directors. (sec 161)
� Power to appoint additional directors. (sec 161)
� Power to declare interim dividend. ( 123(3))
� Power to appoint or remove key managerial personnel (KMP)
� Power to declare solvency , where the company winds up
voluntarily.
� Power to recommend the rate of dividend on the shares of the
company subjected to approval by shareholder of the company
List of Other powers
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10. Powers by
Resolution
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11. � To sell or lease any asset of the company
� To allow time to the director for the repayment of the loan
� To borrow money in excess of paid up capital and free reserves
� To appoint a sole agent for more than 5 years
� To issue bonus shares and for reorganization of share capital
� To contribute money for charitable purposes exceeding Rs. 50,000
or 5%
� of the average profits of 3 years whichever is greater
List of powers by resolution
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12. Managerial
Powers
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13. � Power to contract with the third party
� Power to recommend dividend
� Power to allot, forfeit or transfer shares of company
� Power to take decision regarding terms and conditions for the
issue of debentures
� Power to form policy and to issue instructions for the efficient
running of the business
� Power to appoint Managing Director, Manager, Secretary of the
company.
� Power of control and supervision of work of subordinates
List of Managerial Powers
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14. Managing Director
� A Managing Director is someone who is responsible for
daily operations of a company, organization, or
corporate division. This position is a part of executive
management of a company who is responsible for day
to day management of the company.
� Managing Director can be appointed in a corporate
entity i.e. Limited Company etc.
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15. � As per Section 2(54) of the Companies Act, 2013, a
“Managing Director” means a director who, by virtue of
the articles of a company or an agreement with the
company or a resolution passed in its general meeting,
or by its Board of Directors
� Managing Director is a person who is entrusted with
substantial powers of management of the affairs of the
company. This position falls under the definition of “Key
Managerial Personnel” under the Companies Act, 2013.
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16. Role of Managing Director
� The term Managing Director is equivalent to CEO (Chief
Executive Officer) the executive head of a company. In
other countries, managing directors primarily work as the
heads of individual business units within a company
rather than heading up the company as a whole.
� Managing Director is someone who sees and manages
the operations of a company while having substantial
power to take decisions on the matters relating to the
business of the company.
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17. How Managing Director is
appointed
� Appointment of Managing Director in a company is done in
accordance with the provisions of the Companies Act, 2013
� a company shall not appoint or reappoint any person as its
Managing Director for a term exceeding five (5) years at a
time and no reappointment shall be made earlier than one
year before the expiry of his term.
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18. � The appointment of Managing Director is first approved
by the Board of directors at a meeting and then by an
ordinary resolution passed at a general meeting of the
company. A return in the prescribed form i.e. MR.1 is
required to be filed with Registrar electronically within 60
days from the date of such appointment
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19. Who cannot become Managing
Director
� A person cannot become Managing Director who: is
below the age of Twenty one (21) years and has attained
the age of Seventy (70) years (can be appointed if
authorized by members) is an undischarged insolvent or
has at anytime been adjudged as an insolvent;
� Has at any time suspended payment to his creditors, or
makes, or has at any time made, a composition with them;
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20. � or has at any time been, convicted by a court of an
offence and sentenced for a period of more than six
months had not been sentenced to imprisonment for
any period, or to a fine exceeding one thousand
rupees, for the conviction of an offence under various
Acts as mentioned under section 196 (3) of the
Companies Act, 2013.
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