Duties of Directors Essay Example | Topics and Well Written Essays - 3250 words

Duties of Directors - Essay Example Again, any person in accordance with whose directions or instructions, the board of directors of a company is accustomed to act is deemed to be a director of the company. Speaking about the importance of directors, Neville J. observed in Bath v. Standard Land Co. (1910) that the board of directors are the brain of a company, which is the body and the company can and does act only through them. It is only when the brain functions that the company is said to function. Directors occupy a key position in the management and administration of a company. Their duties are usually regulated by the articles of the company. The duties of a director may be classified under the following heads It is the duty of a director to sign a prospectus and deliver it to the registrar before it is issued to the public. At the time of public issue the directors of the company must sign the prospectus and a copy of it must be submitted to the registrar of companies, before it is issued to the public. It is the duty of the director to see that all the moneys received from applications for shares are kept in a scheduled bank. According to the companies act it is the duty of the director to ensure that all the amounts received from the public in the form of application money are kept in a separate bank account opened with a scheduled bank. It is the duty of the director to ensure... 3. Not to allot shares before receiving minimum subscription It is the duty of the director to ensure that no shares are allotted before receiving minimum subscription. The directors have to ensure that before allotting the shares atleast 90% of the issue has been subscribed by the public. 4. Preparation of statutory report The directors must ensure that the statutory report is prepared and forwarded to all its members atleast 21 days before the date of the statutory meeting. The directors should also ensure that all the information provided in the statutory report are true and not misleading. 5. Holding a statutory meeting It is the duty of the director to hold the board meeting atleast once in three months. According to the companies act every company is required to hold a statutory meeting atleast once in every three months and it is the duty of the director to ensure that this provision is complied with. 6. To disclose his interest in a contract If a director is interested in a contract, it is the duty of the director to disclose the nature of his interest. It is the duty of the director to disclose any interest he has in any contract to be entered into by the company. 7. To call for annual general meeting It is the duty of the director to call for annual general meeting every year. The directors have to ensure that the annual general meetings are held according to the provisions of the companies act. 8. To file statutory returns It is the duty of the director to file all the statutory returns with the prescribed authority. 9. To file declaration of solvency