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    SYBCOM - Legal Position of Director

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    praptipandya89

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    SYBCOM - Legal Position of Director

    Uploaded by

    praptipandya89
    1 views2 pages

    Original Title

    SYBCOM_Legal position of director

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    1 views2 pages

    SYBCOM - Legal Position of Director

    Uploaded by

    praptipandya89

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Legal position of directors

    Directors as an agent
    As discussed, a company cannot act by itself in its own capacity. It
    would always need someone to act on its behalf. A company can only
    act through directors, and this hence makes it a principal and agent
    relationship. This relationship gives the directors the power to act and
    make decisions on behalf of the company. Any contract or transaction
    made on behalf of the company makes the company liable and not
    the directors. No liability occurs upon the directors, they only sign and
    make contracts on the company’s behalf.
    Director as a trustee
    In a company, a director is regarded as a trustee as well. A director is
    known as a trustee because he administers the assets and works
    toward the interests of the company. A trustee is someone who can
    be entrusted with the company’s assets and performs towards
    achieving the company’s goals rather than for their personal
    advantage. Besides these, a trustee is given powers like allotment of
    shares, making calls, accepting or rejecting transfers, etc., which are
    known as powers in trust.
    Director as a managing partner
    The directors of a company represent the shareholders’ will and
    wants. They tend to act on behalf of the shareholders and their goals.
    Due to this, they enjoy vast powers and can perform many functions
    that are proprietary in nature. Due to the provisions mentioned in the
    MOA and AOA of the companies, the board of directors acts as the
    supreme policy and decision-making authority.
    Director as an employee
    Shareholders elect directors in a general meeting held by the
    company. Once the director is elected, he then enjoys the rights and
    powers that are given to him as per the Act. These powers and rights
    cannot be taken away by the shareholders and they cannot interfere
    in the decision-making of the directors as such. Since directors
    possess such powers and rights, they cannot be termed employees of
    the company. This is because employees have limited authority vested
    in them and always work under the directions of the employer and
    cannot interfere in the employer’s decision-making.
    Director as officer
    Directors are also treated as an officer in a company for certain
    matters. They can be held liable for penalties for failure to comply
    with the law.

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