Page 311 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes Manager: He is an individual who, subject to the superintendence, control and direction of the
board of director, has the management of the affairs of the company.
Managing Director: He is ‘director’ who, by virtue of an agreement with the company or of a
resolution passed by the company in general meeting or by its Board of Directors.
Office or Place of Profit: A director is deemed to hold an office or place of profit under the
company if the director holding an office obtains from the company anything by way of
remuneration.
Secretary: A secretary is defined as a company secretary within the meaning of the Company
Secretaries Act, 1980 and includes any other individual possessing the prescribed qualifications
and appointed to perform the duties which may be performed by a secretary.

Ultra Vires: It is a Latin phrase means “beyond the powers”.

12.8 Review Questions

1. Are company directors’ trustees or agents of the company? Comment.
2. X Co. Ltd. wants to make a contract with a partnership. Four of the five directors of the
company are partners of such partnership. How can the contract be executed?
3. Examine the criteria for the disqualifications of a person for appointment as the director of
a company.
4. In conducting the affairs of the company, the directors are found guilty of delay, bungling
and faulty planning, which have resulted in losses and fall in the prices of the shares of the
company. Members holding 1/10th of the voting power in the company apply to the
central government for investigation on the ground that the circumstances establish fraud
on the part of the directors. Is the appointment of an inspector justified under the
circumstances?

5. Examine the critical situation under which a director would vacate office.
6. Total strength of the Board of Directors of a company is ten. How many directors are liable
to retire by rotation at the next annual general meeting?

7. Elucidate the requirements of the Companies Act with respect to contracts in which
particular directors are interested.
8. You are the managing director of the company. You are been asked by one of the director
about the meetings to be held in a year for the company. State how many meetings of a
Board of Directors of a company must be held in a year and at what intervals.
9. Do you think Government also plays an important role in removal of the managerial
personnel on a reference made to the CLB? Justify.
10. Can a director be paid compensation for loss of office? Comment.
11. The directors of a company borrow ` 50000/- from A on a transaction which is ultra vires
the company. Discuss the rights of A against the company and its directors.
12. You are interested in getting appointed as the secretary of a company. Elucidate the
qualifications you must possess for appointment as a company secretary.

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