Different Types of Directors in a Company

A Director is one of the persons appointed by the board of a company who supervises, manages, and controls the affairs of the company. In this article, we will discuss the types of directors in a company.

Types of Directors in a Company

Required Number of Directors in a Company

As per Section 149(1) of the Companies act, 2013, Every Company requires following no of directors

  • In the case of Public Company, a minimum no of 3 directors required.
  • In the case of a Private Company, a minimum no of 2 directors required.
  • In the case of One Person Company, a minimum no of 1 director is required.

A Company can appoint a maximum no of 15 directors. if a company wants to appoint more directors, it can do so by passing a special resolution.

Types of Directors

Following are the list of different types of Directors in a Company

  • Independent Director
  • Managing Director
  • Residential Director
  • Small Shareholder Director
  • Woman Director
  • Additional Director
  • Alternate Director
  • Nominee Director

Independent Director

Independent Director is the director other than a managing director or whole-time director or a nominee director, who doesn’t have any direct or any pecuniary relationship with the company, its holding, subsidiary or associate company, or with their promoters, or directors of the Company. Such Director is a person of integrity and possesses relevant expertise and experience.

Tenure of appointment of such Independent Director of the company is for a term up to 5 consecutive years from the date of appointment. Such Independent director after completion of a term shall be re-appointed, subject to the board approval by way of passing a special resolution.

Every listed public company shall have at least one-third number of the total number of directors as independent directors.

 CG has prescribed the Following Companies are required to appoint at least 2 Independent Directors

  • A Public company having Paid-up share capital of Rs.10 Crores or more
  • A public company having a turnover of Rs.100 Crores or more
  • A Public company having Outstanding Loans or Debentures or Deposits of Rs.50 Crore or more.

Managing Director

As per the provisions of section 2(54) of the companies act, 2013, a managing director is a person who has been charged with substantial powers of management of the affairs of the company either 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.

Residential Director

As per Section 149(3), Every Company is required to appoint at least one resident director. A resident director is a director who has stayed in India for at least 182 days in the previous calendar year.

Small Shareholder Director

As per Rule 7 of the Companies (Appointment and Qualification of Directors) Rules 2014, a listed company is required to appoint a Small shareholder director elected by small shareholders, upon the notice of not less than one thousand small shareholders or one-tenth of the total number of such shareholders, whichever is lower.

‘Small Shareholders’ means a shareholder holding share of the nominal value of not more than Rs. 20,000.

Woman Director

Every Public limited Company is required to have at least one-woman director if such companies satisfy any of the following criteria’s

  • A company whose securities are listed on the stock exchange
  • A public company having paid-up share capital of Rs.100 crore or more OR having a turnover of Rs.300 crore or more.

Additional Director

As per the provisions of section 161 of the Companies act, 2013, Board of Directors if authorized by the articles of association of the company shall appoint an additional director who can occupy their post until the date of conclusion of the next Annual General Meeting or the last date on which the annual general meeting should have been held, whichever is earlier.

Alternate Director

An Alternate Director is the person appointed by the Board of Directors of the company as a substitute to a director who is absent from India for the period, not less than 3 months. An alternate director shall hold office up to the tenure of the original director and he shall vacate office as soon as the original director returns to India.

Nominee Director

A Nominee Director is the Director nominated by any financial institution, or by any government, or by any other person to represent its Interests in case of oppression or mismanagement.

company registration

Duties of Director

  • To act in accordance with the Articles of Association of the Company (AOA)
  • A director of a company is required to act in good faith in order to promote the objects of the company for the sake of the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, and the community and for the protection of the environment.
  • A director of a company has to exercise his/her duties with due and reasonable care, diligence and skill and shall exercise independent judgment.
  • A director of a company should not involve in such a situation which may conflict, or possibly may conflict, with the interest of the company.
  • A director of a company should not attain or attempt to attain any undue gain or advantage either to himself or to his relatives, partners, or associates
  • A director of a company should not assign his office and any assignment so made shall be void.

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