QUALIFICATIONS AND DUTIES OF THE DIRECTORS OF PUBLIC LIMITED COMPANIES

Public Limited Company

• Voluntary association • Separate legal existence • Minimum of seven members • The power of decision making in a company is vested in the

Board of Directors, and all policy decisions are taken at the Board level by the majority rule.

• Formation of a public limited company requires a minimum of three directors are required.

• If different person are not named as first director in articles of the company, individual subscribers shall be deemed to be first directors.

• Every director shall be appointed in general meeting as a general rule.

• A Managing Director must be an individual and can be appointed for a maximum term of five years at a time.

• A person who is already a Managing Director of a public company or a private company can become the Managing Director of only one other company.

• The Companies Act does not prescribe any qualifications for Directors of any company.

• Total managerial remuneration in the case of a Public Company cannot exceed 11% of the net profits, and in case of inadequate profits a maximum of Rs. 87,500 can be paid.

• The Companies Act prevents a Director from being a Director, at the same time, in more than fifteen companies.

• The directors of a company acting through the board can exercise all powers relating to the management of a company's affairs,

• The articles of a company may provide for the appointment of not less than two-thirds of the total number of the directors of a company in accordance with the principle of proportional representation

• encourage and promote the sincerest investment of the best efforts - taking fully mature and wise decisions to avert unnecessary risks to the company.

• A director of a company shall act in accordance with the Articles of Association (AOA) of the company.

• A director of the company shall act in good faith, in order to promote the objects of the company, for the benefits of the company as a whole, and in the best interests of the stakeholders of the company.

• A director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment.

• A director of a company shall not involve 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.

• A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company.

• A director of a company shall not assign his office and any assignment so made shall be void.

• If a director of the company contravenes the provisions of this section such director shall be punishable with fine which shall not be less than one Lakh Rupees but which may extend to five Lac Rupees.