Directors appointment and removal powers lec:04 Flashcards
Basics about appointing and removing personal in corporation
Who is the 1st director?
The first person who signed the memorandum of association by default becomes the first director.
How are directors appointed?
- Appointed by election
- Appointed by nomination by board of directors
- Appointed by nomination by central government
- Appointed by nomination in statutory corporation
- Appointed on the basis of qualification shares
- Appointed on the basis of consent filed
Appointed by Nomination in Statutory Corporation.
This refers to appointments made through formal nominations by designated authorities (e.g., government ministries, regulatory bodies, or stakeholder groups).
Appointed on the Basis of Qualification Shares
This requires individuals to hold a minimum number of shares (pre-determined in the charter) in the corporation to qualify for directorship.
What is a board of directors?
A board of directors (BoD) is a group of elected or appointed individuals responsible for overseeing the strategic direction, governance, and accountability of an organization. It acts as the fiduciary body representing shareholders (in corporations) or stakeholders (in nonprofits/government entities).
Types of directors?
- residential director
- independent director
- small shareholders directors
Residential director?
A director who is required by law to reside in the jurisdiction where the company is incorporated or operates. This role ensures compliance with local regulations and serves as a legal liaison.
Independent director?
A director with no material ties to the company or its management, ensuring impartial oversight and protecting shareholder interests. Required for listed firms in most jurisdictions.
Small shareholders director?
A director elected to represent minority shareholders (those holding <5% shares), ensuring their interests are not overshadowed by majority stakeholders.
