Facebook Twitter Instagram
    Trending
    • Working Capital Management
    • Definition of Financial Performance
    • Difference between Organization & Management
    • E-Commerce
    • Salient Features of Life Insurance
    • Role of Advertising and its Impact
    • Barriers to effective Classroom Communication
    • Significance of Consumer Behaviour
    Facebook Twitter LinkedIn Pinterest RSS
    Info-Desk
    • Home
    • Business Studies
    • Banking
    • Social Science
    • Finance
    • Management
    • General
    • Marketing
    Info-Desk
    You are at:Home » Legal Position of Director

    Legal Position of Director

    0
    By InfoDesk on February 9, 2022 Management

    The position of directors in their relationship to the company is not only as the agent, but also they have to act, to some extent, as trustee of the company and, in the position of trustees, as an employee also. The directors have the following positions in the company.Company Director

    • Director as an Agent: The general position of the directors in the company is that they represent company in dealing with third party. A company, which is a legal entity, cannot act by itself, and it can act only through natural persons who are known as the Board of Directors. Therefore, as per the general principles of the law of agency, where the Directors enter into contracts on behalf of a company in the ordinary course, the company will be liable as principal and not the directors. Directors are agents in transactions they enter in to on behalf of the company, though they are not agents for individual shareholders or members.
    • Director as a Trustee: Directors are not trustees in the legal sense, as the rules applicable to trustees under the Trustees Act do not apply to directors. But, for the assets and properties of the company, in addition to being agents of a company, the directors also act as trustee because they have to hold the company’s properties with utmost trust and manage the affairs of the company for the benefit of the shareholders primarily. The duties attached to the directors are fiduciary in nature, and they have to display good faith towards the company.
    • Director as an Employee: When a director is in the employment of the company, for example, as managing director or whole-time director, he will be treated as an employee. ‘Managing Director’ is treated as an employee held by the Hon’ble Supreme Court.
    • Directors as Officers: For certain matters under the Companies Act, the directors are treated as officers of the company [Sec. 2 (30)]. As such, they are liable to certain penalties if the provisions of the Companies Act are not strictly complied with.
    • Director is not Servant: Directors are not servants of the company but to a certain extent act in the position of managers or managing partners.

    For citing this article, use:

    • Sugapriya, S. (2021). Corporate administration reforms in india a study with reference to listed companies in coimbatore region.
    Management
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    InfoDesk
    • Website

    Related Posts

    Difference between Organization & Management

    Scope, Significance & Characteristics of Employer Branding

    Human Resource Development Climate (HRD Climate)

    Comments are closed.

    Recent Posts
    • Working Capital Management
    • Definition of Financial Performance
    • Difference between Organization & Management
    • E-Commerce
    • Salient Features of Life Insurance
    • Popular
    • Recent
    • Top Reviews
    May 10, 2021

    Fix Keyboard not working in Windows 10 search and start menu

    June 10, 2021

    Human Resource Management (HRM)

    July 3, 2021

    Tools of Performance Management

    March 21, 2023

    Working Capital Management

    March 12, 2023

    Definition of Financial Performance

    March 12, 2023

    Difference between Organization & Management

    Latest Galleries
    Latest Reviews
    Copyright © 2023 InfoDeskBD

    Type above and press Enter to search. Press Esc to cancel.