Financially motivated, nonviolent crimes committed by businesses and government employees are known as white-collar crimes or corporate crimes. These are the type of crimes committed by respectable individuals, holding enviable positions, either in private or public entities. A director’s job is to represent stakeholders and protect their interests. The company is expected to be guided by their expertise and knowledge. It is a requirement of the Companies Act that directors who hold a fiduciary position with regard to shareholders don’t use company funds for personal gain. One such provision is section 185 of companies act. provides information on Company Law provisions that apply to Direct or Indirect Loans or Advances to Directors.
What Is the Role of Directors in a Company?
Generally speaking, the person appointed as a director is a person who directs, conducts, manages or supervises the affairs of the company. Under Section 2(13) of the Companies Act, “Director includes any person occupying the position of the director under whatever name.”
A Director Who Is Independent, What Does That Mean?
According to Section 2(47) of the Companies Act, an ‘independent director’ means an independent director defined by Section 149(6). Section 149(6) provides a description of independent directors’ qualifications.
Is It Possible for an Employee To Become an Independent Director of the Company?
An independent director cannot have been an employee, proprietor or partner of the company during any of the three years immediately preceding the year in which he is proposed for appointment.
How Does a Whole-time Director Work?
It is important to understand that the term “whole-time director” is an inclusive term, which means that a director may not also be an employee of the company.
Can You Explain What a Managing Director Is?
Boards of Directors generally appoint one of their members to manage the company’s affairs as a full-time officer, known as the Managing Director. position of dual authority and responsibility. As a director, he attends the Board meetings and, as a manager, he performs the managerial functions.
Section 185 Imposes What Restrictions?
A director’s loan is covered by Section 185. A company may not, directly or indirectly, advance any loan, including a loan represented by a book debt, to its directors or to any other individual in whom the director has an interest, give any guarantee or provide any security for any loan taken by him or that person, according to Section 185.
How do you define “persons who are of interest to the director”?
As used in this section, the expression “to any other person in whom the director has an interest” means:
- Anyone who is a director of the lending company,
- The company’s holding company’s directors
- Any partner or relative of such a director
- Directors or relatives who are partners in any firm
- An individual who is a director or member of a private company
- Directors should be aware with the Companies Act in order to comply with company law
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