Duties Of Director Of A Company


Certain obligations and responsibilities must be fulfilled by a director of the company, a limited company, or a one-person corporation. A new director may be unaware of these responsibilities. The tasks of a director are vital for the functioning of a firm, which in turn will have a strong board of directors, as you will learn in this article.

A list of functions and responsibilities for a company’s director may be found in the Companies Act of 2013. However, before we go any further, it’s important to grasp the director’s responsibility in a corporation.

A director is an individual who, by the Companies Act of 2013, executes the duties and obligations of a director.

They operate as trustees for the company’s assets and act as an agent in the company’s transactions.

The Number Of Directors Required By Law In Various Types Of Businesses Is As Follows:

  • A one-person company has a minimum of one director and a maximum of fifteen.
  • A private limited company (PLC) has a minimum of two directors and a maximum of fifteen.
  • A public limited company has a minimum of three directors and a maximum of fifteen.

In any of the following instances, however, the number of directors may be increased by enacting a Special Resolution.

Director’s Duties

  • To accomplish the tasks of a director, most directors must rely on their abilities and expertise. A director may be required to serve as an officer, a trustee, or an agent in the corporation if necessary.
  • All directors of various firms registered with the ROC of India must meet certain requirements. The reality is that many startup directors are unaware of their responsibilities. As a result, they make some costly blunders at the end of the day.
  • Many people will neglect to educate themselves on these topics, but any director of a firm, whether private or public, should be aware of his or her responsibilities before taking the position. Nothing that follows will be revolutionary. 
  • After all, you should be aware that as a director, you must act in the company’s best interests. Nonetheless, below is a list of the director’s responsibilities.

Best Interests

The director must always act in the best interests of the firm, putting the company’s interests ahead of personal considerations. Even if a director is acting honestly, he or she is not acting in the best interests of the organization.

Asset Management Is A Process Of Maximizing The Value Of A Company’s Assets

A director is in charge of the company’s assets and is the signatory in any of the company’s assets that are transferred. This power must not be abused by the director.

Maintain Confidentiality Of Information

As a director, you have access to all pertinent information regarding a company’s activities and finances. This information should be kept private and not shared with anyone unless it is for the company’s advantage.

Participate In Meetings

A board member is required to attend as many meetings as feasible. Any director who misses more than three board meetings in a calendar year shall be removed from the board.

Powers Not To Be Exceeded

A company’s Memorandum of Association (MOA) describes what it can do, while its Articles of Association (AOA) spell out the rights granted to its directors. The board of directors must guarantee that it stays within each of these parameters.

As a director of a corporation,  keeping all information about it is discreet. If your company is listed on one of India’s stock exchanges, confidentiality is even more important. For unethical conduct and omissions that are prohibited by law, you could be punished with insider trading.

Who Is Ineligible To Serve On A Board Of Directors?

The following individuals are ineligible to serve on a company’s board of directors:

  • A person of unsound mind, a bankrupt/insolvent who has not been discharged, or a person who has been convicted of a crime
  • A person who has been declared ineligible for nomination as a director by a court or tribunal.
  • A person guilty of the offense of dealing with related party transactions 
  • A person who has not paid any calls in respect of any shares of the firm held by him/her and six months have passed after the final day for payment of the call.

What Is The Distinction Between Non-Executive And Executive Directors?

A company’s directors come in a variety of shapes and sizes, but they can be divided into two categories: executive and non-executive. An executive director is a full-time employee of the company who is involved in the day-to-day operation of the organization. A non-executive director is a member of the board of directors who is not in charge of the company’s management.

What Are The Directors’ Responsibilities?

The following are the directors’ responsibilities:

  • Identifying the company’s strategic goals and policies.
  • Monitoring progress in fulfilling the company’s policies and objectives.
  • Making senior management appointments.
  • Accounting to relevant parties, such as shareholders, for the company’s activities.


A company’s director is known as the Agent of the Firm, and it is his or her job and responsibility to act to the best of his or her ability and in the best interests of the company. A director cannot be held personally accountable for a board of directors’ error of judgment. A director, on the other hand, can be held accountable for fraud and mismanagement.