DIRECTORS OF A COMPANY. — SPCC STD 12 Commerce — Question

No.

Point

Managing Director

Director

1

Appointment

Managing director is appointed by the Board of Directors and they decide the term and conditions.

Director is appointed in the Annual General Meeting. There are no terms and conditions.

2

Term

Managing director is appointed for five years.

Director has to retire as per rotation.

3

Position

Managing director is one of the directors. He execute day to day work.

Directors are elected by share holders. They manage the company.

4

Compulsion

Appointment of Managing Director is not compulsory.

Appointment of Director is compulsory.

5

Function

Managing Director carries on day to day administration. He has to execute policies of the Board of Director.

Board of Directors does not carry out day to day administration, but decides the policies of management.

6

Control

Managing Director works under the control of Board of Directors.

Board of Directors works independently.

7

Compensation

Managing Director can be paid compensation on termination of his office.

Directors have no such rights to get compensation.

8

Work in how many

A person can work as Managing Director in not more than two companies.

Director can work maximum in 20 companies.

9

companies Number

Generally only one Managing Director is appointed in a company.

There must be at least 3 directors in public company and two in a private company.

10

Retirement

Managing director retires after 5 years. He is eligible for reappointment,

1/3 of the 2/3 directors retires by rotation every year. They are elegible for reappointment.