legal position of directors Essay Example

legal position of directors Essay LEGAL POSITION OF THE DIRECTORS OF THE COMPANY Mrs. Kamya Rani Mrs. Sukhbir Kaurl A company is an artificial person created by law. It functions through human agents who are collectively called Board of Directors. They are termed as Trustees of the assets of the company who sees that company business is carried on in accordance with the Memorandum and Articles of Association of the company. They decides policies of the company keeping in view the main objects for which the company was formed. Only an Individual is eligible for appointment as a Director of the company. There are various types of directors: 1 . Executive Directors i. e Managing Director, Whole time director 2. Non Executive Director Nominee Director Institutional Nominee Promotional Institutional Nominee Lending Institutional Nominee Holding company nominee Collaborator Nominee Government Nominee us. 48B Debenture holder Nominee Independent Director Others The individual cannot be a director for more than 15 public limited companies. The Directors of the company are custodians of the interest of the stakeholders which includes: (i) Employees Shareholders Creditors Customers Society It is not easy to explain the position that a director holds in a corporate enterprise. A director is not a servant of any master. He is the controller of the companys affairs. Director of a company is neither an employee nor a servant to the company. They are professional people who were hired by the company to direct its affairs. However there is no restriction under the Act, that a director cannot be an employee to the company. In Lee v. Lees Air Farming Ltd 1961 AC 12, it was held that, a director may, however, work as an employee in different capacity. We will write a custom essay sample on legal position of directors specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on legal position of directors specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on legal position of directors specifically for you FOR ONLY $16.38 $13.9/page Hire Writer There is no definite definition for irector under the Companies Act, 1956. Director includes any person who is occupying the position of a director, whatever name called. Director As Agents In Ferguson v. Wilson (1866) 2 Ch App 77, the court clearly recognised that directors are in the eyes of law, agents of the company. It was held that, the company has no person; it can act only through directors and the case is, as regards those directors, merely the ordinary case of a principal and agent. When the directors contract in the name, and on behalf of the company, it is the company which is liable on it and not the directors. In Elkington Co. v. Hurter 1892(2) CH 452, where the plaintiff supplied certain goods to a company tnrougn Its cnalrman, wno promlsea to Issue nlm a debenture for the price, but never did so and company went into liquidation, he was held not liable to the plaintiff. Similarly, a director was held to be personally not liable in a suit against a private chit fund company. Attachment of the property of the director was held to be not permissible. Like agents, directors have to disclose their personal interest, if any, in any transaction of the company. In Ray Cylinders Containers v. Hindustan General Industries Ltd(2001) 103 CC 161, held that, the directors are the agents of the institution and not of its individual members, except when that relationship arises due to the special facts of the case. Also granted permission to file a suit against a company was not allowed to be treated as permission against directors as well. In Sarathi Leasing Finance Ltd v. B Narayana Shetty(2006) 131 CC 798, the articles of association empowered the managing director to represent the company in legal proceedings. It was held that a further authorization was not necessary to enable im to file a complaint for dishonor of cheque under Sec. 138 of Negotiable Instrument Act. Directors are the agents of a company. They are acting on behalf of the company. So the directors cannot be held personally liable for any default of the company. It was held that, for a loan taken by a company, the directors, who had not given any personal guarantee to the creditor, could not be made liable merely because they were directors. Director As Trustees Directors are the trusties of the companys money, property and their powers and such must account for all the moneys over which they exercise control and shall efund any moneys improperly paid away, and shall exercise their powers honestly in the interest of the company and all the shareholders, and not their own sectional interest. To whom the directors are trustee? Whether to the company or to the individual shareholders. This principle was laid down in 1902 in Percival v. Wright, and still holds ground as a basic proposition. In this case the court held that, directors have no duty towards individual shareholders. From this it is very clear that, the directors are trustees to the company and not of individual shareholders. The principle of the case was reiterated in Peskin v. Anderson. Ordinarily the directors are not agents or trustees of members or shareholders and owe no fiduciary duties to them. However we have to take the decision of Allen v. Hyatt(1914) 30 TLR 444. It was held that, the directors are trustees of the profit for the benefit of the shareholders. They cannot always act under the impression that they owe no duty to the individual shareholders. But it is of no doubt that the primary duty of the director is to the company. Director As Organs Of Corporate Body The organic theory of corporate life treats certain officials as organs of the company, or whose action the company is held liable Just as a natural person is for the action of his limbs. Thus the modern directors are more than mere agents or trustees. The Board is also correctly recognised to be a primary organ of the company. Directors and managers represent the directing mind or will of the company and control what it does. The state of mind of these managers is the state of mind of the company and is treated by law as such. The practical effects of these rules are that the directors personal fault in the business of the company becomes the fault of the company; nelr reason to Delleve Is attrlDutea to tne company ana tne Intentlon to occupy a premises as expressed by their conduct is the intention of the company. CHANGES MADE BY THE NEW COMPANIES ACT, 2013 The 1956 Act prescribed minimum 2 directors for a private and 3 for a public company respectively to constitute a Board. This criterion has been retained by the new Act, but the maximum limit of directors on the Board has now been raised from 12 to 15. The Act has also removed the stringent compliance of securing prior Central Government approval for raising the number of directors beyond the prescribed limit nd, instead, a comparatively simpler method of approval by means of a special resolution of the shareholders has been introduced. Additionally, new changes include mandatory presence of independent directors on the Board of listed public companies and minimum one woman director in the case of certain class of companies to be notified later, thereby bringing more transparency and gender equality into the Board rooms. The legislation clearly defines the role of such independent directors and has a detailed Code for independent directors appended to it, which contains explicit guidelines for professional conduct, roles and esponsibilities of such directors. They are bound by this Code to play a role in the appointments, determination of remuneration and removal of executive directors, managers and key managerial personnel. In view of the fiduciary position held by directors, explicit provisions prescribing directors duties have been added to the new Act. These include keeping away from situations in which they have conflicting interest with that of the company, duty to make good in monetary terms any undue gain/advantage on the part of the directors etc. Independent directors: The provision o make companies have one-third of their board members as independent directors is fine in principle. Independent directors (IDs) are also more stringently defined, and their tenures will be limited to two terms adding up to 10 years. IDs can also hold a maximum of 20 directorships. The best thing about the new Companies Act is that it is simple, with greater clarity of intent and purpose. Sounds good? But there are pitfalls. For three reasons. First, how independent can IDs be when they are appointed and paid for by the promoters? Will promoters appoint truly independent people on boards? Second, are there enough persons available to be appointed as IDs? In theory, yes, because there are no qualifications for becoming an ID. But, in practice, once you tell the prospective person the responsibilities he will bear, the actual number of competent and willing IDs diminishes. Most IDs, in fact, end up adorning corporate boards without the time or commitment to work in the interests of shareholders. Third, if eligible IDs end up taking up 20 directorships each, how can they really serve each of those companies shareholders diligently? According to a CNBC TV18 report, AnalJit Singh of Max India, for example, attended only one out of 4 board meeting of Dabur in three years, before he resigned. How did he really help protect Daburs shareholder interests by remaining absent? The conclusion: it is good to have many IDs, but corporate governance will need a heavy dose of regulation too to complete the picture. Women directors: It is important for corporate boards to ensure gender diversity, but before that happens, a supply of women eligible for board positions needs to be created. According to GMI Ratings Women on Boards Survey 2013, even on the worlds best-known companies, women account for only 1 1 ercent 0T total alrectorsnlps. In Inala, a sample 0T BY companies witn more tnan S billion in market valuation, the women percentage is less than 7 percent. And we are talking only about the biggest companies here. Clearly, major efforts will have to be made to create more women directors, but before that there have to be more women reaching the top of the corporate hierarchy. The legislation should act as a spur to womens empowerment, but compliance could be years away. Refrences Company Law, Bangia Company Law, PranJape wmwmanupatra. com www. companylawreporter. com www. caclubindia. com

Witches essays

Witches essays This book is about a young boy who is on an adventure to discover the truth about Witches! This young energetic boy is called...well actually he doesnt have a name, he is just known in the book as Boy, and he is kind of the narrator in this book. Anyway the person responsible for beginning his fascination about witches was his very own grandmother. His grandmother was Norwegian, and apparently all the Norwegians knew about these so called Witches! The Boy lived in England with his parents, while his grandmother lived in Norway and usually twice a year his family would come down to Norway to visit his grandmother. Unfortunately, just soon after his seventh birthday, they were heading up to Norway and their car skidded off the road and came tumbling down into a rocky ravine, both his mum and dad died in this tragic accident and strangely the boy only got away with a minor cut in his forehead! After that it was arranged that he had to live with his grandmother in Norway. The grandmother trying to help the boy forget his tragic lost decided to tell him stories. She told him all kind of stories, but out of all the topics, Witches was the most he was really interested about! She had told him about 5 children who had an encounter with a witch and never lived to tell the tale. In one of these stories this one really fascinated me...there was a family called Christiansen, the lived up on Holmenkollen and they had a really old oil painting in the living room which they were very proud of. The painting showed some ducks in the yard outside a farmhouse, there were no humans painted. It was a rather large painting and really pretty. Anyway one day their daughter came home eating an apple, she said that a nice lady had given it to her. The next morning they couldnt find their daughter anywhere, it was like she had vanished into thin air, but in the end they found her, they found her in the painting! ...

Case study #2 Example | Topics and Well Written Essays - 750 words

#2 - Case Study Example While this is so, there are those companies that show very little concern about what customers think about the services that they get and this can turn out to be very damaging to not only the reputation of the firm but also the income the firm generates. This paper will be looking at the two companies with both extremes in customer service- Amazon with the best and AT&T with the worst. The paper will also state a recommendation for each company that can help improve their customer service. Amazon has been voted the company with the best customer service the second time in a row. There are particular reasons why the company stands out in its customer satisfaction record. Those who have had to return items they had bought from Amazon agree that indeed the customer service of the company is commendable. Jeff Bezos, the founder of the company, is among the most passionate people when it comes to the satisfaction of the customer. Bezos’ is known for the use of his infamous "empty chair" in all boardroom meetings. Bezos asks that a chair be left empty as that is the spot for the customer. The use of the empty chair reminds the other panel members that the boss in the company is actually the customer and should be considered whenever developing any policies for the business. It is this culture of being customer minded that makes everyone in the firm be willing to serve the customers with high regard. Other than this, Amazon demands that every manager and other employees learn how to interact with the customer so that the entire firm is as customer-centric as possible. Bezos is quoted saying that every member of staff, including himself, has to be able to work at a call center. To make this possible, the CEO has every employee get in touch with the customers even if it is for a few days only. Amazon knows that understanding how the customers view, use, and talk about the products they sell is significant to a business and thus lets every member of

Research and develop knowledge on the Atrio PMS system and apply it to Paper

And develop knowledge on the Atrio PMS system and apply it to the Diva hotel( San Francisco) - Research Paper Example When people arrive at the hotel, they have to stroll past an amazing sidewalk of fame, which is the superb Diva sidewalk that has signatures of celebrity guests and entrance directly in its lobby. Recently, the hotel renovated its structure and now it offers most extraordinary features to its customers (Hotel Diva, 2012). Each room in the hotel has been renovated with the most superb amenities that comprise carpeting with cobalt, headboard sculptured with stainless steel, CD players set inside the room, two telephones that have touch-tone and allow global internet data ports, voicemail and fax machine, latest televisions with VCRs, pay-per-view movies, Nintendo, honor bar showcase that has special items of San Francisco, maid services, and fresh newspapers (Stowe, 2012). All dining facilities are superb: California Pizza Kitchen, which offers inside dining and room service, and Starbucks, which is adjacent to the lobby. Along with dining facility, there are top quality day laundry an d dry cleaning services, parking by valets that offer parking within and outside privileges, workout room with complimentary cardio services, video library that has a range of newly released films, a caretaker lounge that has magazines, brochures of tourism in San Francisco, literature on San Francisco, as well as green apples of Granny Smith and a gourmet coffee. The hotel is fully-equipped for business; it offers wireless high-speed internet access (â€Å"The Future of Hospitality is Here†, 2012). The target market of Hotel Diva comprises rich people looking for best quality services and complete access to all mandatory amenities. According to Creamer (2012), Diva Hotel has a reputation for offering customized services that are in accordance with customer demands; its management supports innovation and even has boutique properties that are providing access to ample services in a nearby location. The main objective of Hotel Diva is to exceed customer expectations by providin g superb quality services and instant access to the most diverse range of facilities (Hotel Diva, 2012). ATRIO Property Management System (PMS) PAR Springer-Miller Systems, Inc., commonly known as PSMS is the wholly owned subsidiary of PAR Technology Corporation, which is recognized globally for providing hospitality management systems that are guest-centric, so that hotels, restaurants and all companies of hospitality industry can effectively manage their operations (ParTech, Inc., 2011). The company is well-known for development of ATRIO system for hospitality industry that can revolutionize the operations of all companies present in this particular industry. ATRIO platform of solutions is believed to be the latest generation of hospitality management software, which have been purchased by and built for hotels so that they can maintain their IT infrastructure (â€Å"ATRIO Guest Experience Management†, 2012). Since technological advancements happen on an ongoing basis, it is crucial for companies to upgrade their IT systems so that they have well-designed IT infrastructures that will allow them to integrate all requirements of hotel businesses; ATRIO is the best alternative for IT solutions, as it allows hotel owners to save money and control their IT cost. Every hotel and resort has a choice of deployment either on premises or on cloud or even a combination of

Lone Wolf Terrorism and National Security Research Paper

Lone Wolf Terrorism and National Security - Research Paper Example A security officer died in that incidence. In early 2010, a protestor flew a plane into an office of IRS in Austin, Texas, injuring 13 bystanders and killing himself. 2009’S Christmas Day attempt to fell a jetliner using a bomb and a 2000 failed car bombing in Times Square were allegedly done by one person. In addition, the following incidents were connected to a single person, a 2010 effort to bomb New York subway lines, a plot in 2010 to blow up the residence of former president George W. Bush in Dallas, the shooting of Congresswoman for Arizona, and some of her followers in Tucson, and an attempt by a bomber to blow himself up in 2012 inside the building. The episodes have created serious concern at the top of the political order, and the apparent threat of unrelated terrorism has prompted crucial changes in requirements for hindering its occurrence, which include the beginning of a â€Å"lone wolf provision†. The provision was introduced into the Foreign Intelligence Surveillance Act (FISA) of America. The phrase ‘lone wolf’ was made popular in the 1990s by white supremacists Alex Curtis and Tom Metzger in order to encourage other racists to take action alone for security  reasons when performing violent crimes. Other phrases used to depict similar types of political violence are ‘leaderless resistance’, ‘freelance terrorism’ and ‘individual terrorism’. In modern days, the media and US law enforcement agencies use the term "lone wolf" to refer to people undertaking brutal terrorist acts outside an authority structure. The lone wolf operates to advance the philosophical or ideological faiths of an extremist group (Michael, 2012). The lone wolf methods and tactics are directed on their own. In many cases, a lone wolf never has contact with any group they have links with.     

Cubism -the Weeping Woman Essay Example for Free

Cubism -the Weeping Woman Essay Cubism was an art movement which originated in France and Spain in 1906. Cubism influenced painting movement. Cubist artists include Pablo Picasso, George Braque and Juan Gris. Picasso had recently travelled to Africa and native America and was inspired by the tribal masks. Cubist Artists captured different view points at the same time. This showed collage and made the image look 3D. In the painting ‘The Weeping Woman’ she looks like she is at home. I get this idea from the border behind her in the middle of what looks like two walls. I also think it looks homely because it is painted yellow, a colour associated with warmth and comfort. It could also be a church, the brown strip could symbolise the wooden seats in a church. Another thing it could symbolise, is the attendance of a funeral because she is wearing black coloured clothing. In the middle of her face, which is the colour white/blue, it could mean a part of her being taken away, not only is her colour draining away, but so are her emotions. She seems to be hiding her sadness. You can tell she is sad and upset because her eyes look glazed over and there is a red/pink blush under her eyes and nose which could show that she has been crying and has wiped her tears away. The sharp jagged lines could represent how she is holding herself together, and maybe the other emotions she feels, like anger. You can see that she is in distress as she has creases on her forehead. The bits of green blended in with the yellow could represent jealousy, but could also symbolise being ill or sick. She is so upset that its actually making her feel weak and unwell. The white could also be seen as being some kind of ghostly figure, which links back to the thought of her attending a funeral, and why she is so upset. The green representing jealousy, could be envy for other people who’s loved ones are still with them. Her hands look like they are together, like she is trying to pray, for the protection of her loved one in the afterlife. She could also be holding something, like a tissue to wipe away her tears, a possession of the bereaved, a letter or a will. This painting was actually painted representing the weeping woman as a mother of a soldier who had died at war. This connects to the thing she could be holding, as when a soldier dies at war, they usually send a letter to inform the close family of this.

The Underground Railroad in North Carolina Essay -- Slavery American H

The Underground Railroad in North Carolina The Underground Railroad was perhaps the most active and dramatic protest action against slavery in United States history and as we look at the Underground Railroad in North Carolina we will focus on the Quakers, Levi Coffin’s early years, and the accounts of escaped slaves from North Carolina. The unique blend of southern slave holder and northern abolitionist influences in the formation of North Carolina served to make the state an important link in the efforts to end slavery inside and outside of North Carolina borders. Although not "underground" nor a "railroad," this informal system became a loosely constructed network of escape routes that originated in the South, intertwined throughout the North, and eventually ended in Canada and other places where runaways were safe from being recaptured. From 1830 to 1865, the Underground Railroad reached its peak as abolitionists who condemned human bondage aided large numbers of slaves to freedom. They not only called for an end to slavery, but acted to assist its victims in securing freedom. Unlike other organized activities of the abolition movement that primarily denounced human bondage, the Underground Railroad secretly resisted slavery by aiding runaways. Because the Underground Railroad had a lack of formal organization, its existence often relied on the efforts of many people from many different aspects of life in North Carolina who helped slaves to escape. Accounts are limited of individuals who actually participated in its activities. Usually conductors hid or destroyed their personal journals to protect themselves and the runaways. However some first hand accounts from runaway slaves were recorded. The shortage of evid... ...nd courage of the black North Carolinians that had to flee along the Underground Railroad for their lives and freedom. Bibliography Levi Coffin(1789-1877) , Reminiscences of Levi Coffin (New York: Arno Press, 1968) Curtis, Anna Louise (1882-) Stories of the underground railroad, by Anna L. Curtis; foreword [by] Rufus M. Jones, illustrated by William Brooks Publisher New York, The Island Workshop Press Co-op, 1941 The Underground railroad, official map and guide [Washington, D.C.?] : National Park Service, U.S. Dept. of the Interior, [1996] William Still(1821-1902) , The Underground Railroad (New York, Arno Press, 1968) The Fugitive Slave Law ,US Congress, 1793 US Historical Documents Archive, http://w3.one.net/~mweiler/ushda/fugslave.htm Fugitive Slave Act 1850 ,The Avalon Project, Yale Law School http://www.yale.edu/lawweb/avalon/fugitive.htm