A company director is an elected individual who along with other directors are responsible for a company’s corporate policy. Collectively, directors form the Board of Directors. A company director is person who is expected to play several roles in an organization, he is viewed as a rationally diligent person who possesses skills, knowledge, and relevant experience and expertise.
Section 2(34) of Companies Act, 2013, a Director means a director appointed to the Board of a Company. The Act also defines different categories of directors depending on the role that they play on the company.
Residential Director
As per Section 149(3) of Companies Act,2013, every organization is required to appoint a director who has resided in India for a minimum of 182 days in the previous calendar year.
Independent Director
An independent director is an alternate director other than a Managing Director who is known as a Whole Time Director or a Nominee Director, as specified in Section 149(6). According to Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2013, the following are the kind of companies who are required to appoint a minimum of 2 independent directors:
- Public Companies which have Paid-up Share Capital of Rs 10 Crores or more
- Public Companies which have Turnover of Rs 100 Crores or more
- Public Companies which have total outstanding loans, debenture, and deposits of Rs 50 crores or more.
Small Shareholders Director
A listed company, upon the notice of minimum 1000 small shareholders or 10% of the total number of the small shareholders, shall have a director which would be elected by small shareholders.
Women Director
Section 149 (1) (a) requires a company, whether it is a private company or a public company, to appoint at least one woman as a director on the Board if it satisfies any one of the following criteria:
- The company is a listed company and its securities are listed on the stock exchange.
- The paid-up capital of such company is Rs 100 crores or more.
Additional Director
As per Section 161(1) of the New Act, any individual with due credibility can be appointed as an additional director, and can rightfully hold that post until the next Annual General Meeting of the company. In case the meeting does not take place, then the term shall conclude on the date the meeting was scheduled to be held.
Alternate Director
If a director is away from the country for more than 3 months, then the board can appoint a person who will take on the responsibilities as an ‘Alternate Director’ to fill in for that particular person.
Nominee Directors
A specific class of shareholders, banks or lending financial institutions, third parties through contracts, even the Union Government in the scenario of oppression or mismanagement can appoint Nominee Directors.
Shadow Directors
A Shadow Director is that person who is not appointed to the Board but has enough power to make the Board act along the decisions they make, are liable as a Director of the company, unless he or she is giving advice in his or her professional capacity.
