Duties of Directors
The Companies Act, 2013 enlists the specific fiduciary Duties of a director. A director of a company shall:
- Act in accordance with the Articles of the company;
- Act in good faith to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community, and for the protection of the environment;
- Exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment;
- Not get involved in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company;
- Not achieve or attempt to obtain any undue gain or advantage either to himself or to his relatives, partners, or associates, and if found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company;
- Not assign his office, and any assignment so made shall be void.
A director who contravenes the provisions of this section (Section 166) shall be punishable with a fine not less than INR 100,000, which may extend to INR 500,000.
Compliances by Directors under the Companies Act, 2013
- Obtain a Director Identification Number (DIN);
- Give a declaration that he is not disqualified to become a director under the Act;
- Disclose his interest in any company or body corporate, firms, or other association of individuals at the first Board meeting, at the first Board meeting in every financial year, or whenever there is any change in the disclosures already made, then at the first Board meeting held after such change;
- Mention his DIN while furnishing any return, information, or particulars, as required under the Act;
- The total number of companies in which a person can hold office as a director shall not exceed:
- 10 in public companies
- 20 in private companies
- 20 in both public and private companies
The functions of the Company Secretary include:
- To report to the Board about compliance with the provisions of the Companies Act, 2013, the rules made thereunder, and other applicable laws;
- To ensure that the company complies with the applicable secretarial standards;
- To discharge such other duties as may be prescribed.
- 5.Section 166 of the Companies Act, 2013, Ministry of Corporate Affairs, http://www.mca.gov.in/
Ministry/pdf/CompaniesAct2013.pdf, accessed on 20 September 2020