Management | Company Law - B Com PDF Download

 Page 1


Company Management
Page 2


Company Management
Introduction
• Need for proper management
• Companies contain stringent provisions  
regarding powers function of managerial 
personnel of a company regarding appointment, 
powers, function of managerial personnel of a 
company
• Managerial person refers to part time directors, 
whole time directors, MD or managers and 
excludes other executives irrespective of their 
salary.
Page 3


Company Management
Introduction
• Need for proper management
• Companies contain stringent provisions  
regarding powers function of managerial 
personnel of a company regarding appointment, 
powers, function of managerial personnel of a 
company
• Managerial person refers to part time directors, 
whole time directors, MD or managers and 
excludes other executives irrespective of their 
salary.
Director
• Director is any person occupying the position of a director by whatever name 
called.
• Director is a person who is responsible fro directing, governing or controlling the 
policy management of a company.
• Directors are collectively called as board of directors or board..
• If co. is the body, the directors are the brain.
• Section 291 expressly vests the management of a business of a company in its 
director.
• Only the most important matters of the boards policy will be referred to the share 
holder for a decision.
• Board is the supreme policy framing and decision making body of a company.
Page 4


Company Management
Introduction
• Need for proper management
• Companies contain stringent provisions  
regarding powers function of managerial 
personnel of a company regarding appointment, 
powers, function of managerial personnel of a 
company
• Managerial person refers to part time directors, 
whole time directors, MD or managers and 
excludes other executives irrespective of their 
salary.
Director
• Director is any person occupying the position of a director by whatever name 
called.
• Director is a person who is responsible fro directing, governing or controlling the 
policy management of a company.
• Directors are collectively called as board of directors or board..
• If co. is the body, the directors are the brain.
• Section 291 expressly vests the management of a business of a company in its 
director.
• Only the most important matters of the boards policy will be referred to the share 
holder for a decision.
• Board is the supreme policy framing and decision making body of a company.
Legal Position 
• As Agents: They are merely agents of the company.The company 
itself cannot act on its won, it can only act thro. Directors and the 
case is as regards those directors merely ordinary case of principal 
and agent.Their acts within scope of their authority are acts of the 
company itself. And the company is liable for them.
• As managing Partners: Directors are elected representatives of the 
share holders and therefore they are in position of the managing 
partners. The fact that they are important shareholders also makes 
them partners  with other share holders. They also do 
properietorial functions like allotting shares, making calls, forfeiting 
shares.
• As trustees: It is the palin duty of directors who are trustees for the 
company to dela in all matters of business with which the company 
is concerned for benefit of the company and not with regard to 
their own particular interest
Page 5


Company Management
Introduction
• Need for proper management
• Companies contain stringent provisions  
regarding powers function of managerial 
personnel of a company regarding appointment, 
powers, function of managerial personnel of a 
company
• Managerial person refers to part time directors, 
whole time directors, MD or managers and 
excludes other executives irrespective of their 
salary.
Director
• Director is any person occupying the position of a director by whatever name 
called.
• Director is a person who is responsible fro directing, governing or controlling the 
policy management of a company.
• Directors are collectively called as board of directors or board..
• If co. is the body, the directors are the brain.
• Section 291 expressly vests the management of a business of a company in its 
director.
• Only the most important matters of the boards policy will be referred to the share 
holder for a decision.
• Board is the supreme policy framing and decision making body of a company.
Legal Position 
• As Agents: They are merely agents of the company.The company 
itself cannot act on its won, it can only act thro. Directors and the 
case is as regards those directors merely ordinary case of principal 
and agent.Their acts within scope of their authority are acts of the 
company itself. And the company is liable for them.
• As managing Partners: Directors are elected representatives of the 
share holders and therefore they are in position of the managing 
partners. The fact that they are important shareholders also makes 
them partners  with other share holders. They also do 
properietorial functions like allotting shares, making calls, forfeiting 
shares.
• As trustees: It is the palin duty of directors who are trustees for the 
company to dela in all matters of business with which the company 
is concerned for benefit of the company and not with regard to 
their own particular interest
• Number of Directors: Every public company must have at 
least three directors and every private company must have 
at least two directors. The articles of a company may 
prescribe the maximum and minimum number of directors 
for its board.
• Small shareholders may have a director:  The companies 
act, 2000 has amended section 252 to the effect that a 
public company having a paid up capital of Rs 5 crore and 
one thousand or more small share holders, may have a 
director elected by such small shareholders in the manner 
as may be prescribed by central government.
• Small share holder means a share holder holding shares of 
nominal value of rs. 20,000 or less.