Who is Director in a Company?
- Director is an individual who directs, manages, oversees or controls the affairs of the Company.
- He is a person appointed to the Board of a company to perform the duties and functions of a company in accordance with the provisions of The Company Act, 2013.
- Director of a company is a natural person elected by the shareholders as per the Memorandum of Association and Articles of Association of the company.
- The Board of Directors means a group of those individuals elected by the shareholders of a company to manage the affairs of the company.
Minimum number of director based on the type of the company:
Type of company |
No. of Director required |
One Person Company |
1 |
Private Limited Company |
2 |
Public Limited Company |
3 |
Necessity / Reasons of appointing an additional Director in a company:
The following are the circumstances in which it would be necessary to add or appoint a director:
- When there is sudden death or plans of retirement / resignantion or other personal reasons, if the existing Directors are unable to work for a long time, in such cases appointing an additional director is necessary to meet the statutory limit of the company.
- For the growth of business, it is necessary to hire new talent in the management of the company.
- In case where there is new product line or department added in the company, then to lead the team, appointing an expert as a director is necessary.
- When the specified statutory number of directors reduces, then it is mandatory for a company to appoint a new director.
- To help the shareholders assign more operational responsibilities without losing any strategic control.
Eligibility criteria for a person to be appointed as director in a company:
- The person appointed must be eligible as per the relevant clauses in the Articles of Association.
- The proposed individual must be above the age of 18 i.e. a major.
- He or she must qualify as per the laws mentioned under the Companies Act, 2013.
- The Members of the Board must consent to the appointment of the proposed individual in which he seeks to get appointed as director.
- It must be noted that the Companies Act does not mention any educational qualification in order to be eligible to become a Director.
- Indian National, Non-Resident Indians, and Foreign Nationals can be appointed as a director in India.
