Company Registration in Tirupur
This definition, in Section 2(34) of the 2013 Act, substantially differs from the definition of 'director' in section 2(13) of the 1956 Act. As per the 1956 Act, director' included any person occupying the position of director, by whatever name called. As per the 2013 Act, a person appointed to the Board alone will be considered as director. This means that the concept of shadow director will now no longer apply. However ss 2(59) and 2(60) dealing with officer and officer in default do include the concept of shadow director although compliances under the 2013 Act relating to directors is not attracted in case of such shadow directors.
Companies Act, 1956: Section 2(13)
The 1956 Act proceeded not on the basis of a formal appointment of a person to the Board but more by the position or function discharged by him. The main difference is the concept of shadow director which is now not contained in the 2013 Act. Section 386(b) of the 2013 Act also provides that the expression "director", in relation to a foreign company, includes any person in accordance with whose directions or instruction the Board of Directors of the company is accustomed to acting.
Meaning of the term 'Director'
Essentially, it should not be the name by which a person is called but the position he occupies and the functions and duties which he discharges that should determine whether in fact he is a director or not.
So long as a person is duly appointed by the company to control the company's business, and authorized by the articles to contract in the company's name and on its behalf, he functions as a director. While a shadow director was earlier considered as a director, under the 2013 Act he will be an officer and an officer in default. He is not considered as a director under the 2013 Act for the purpose of few other provisions of the Act like remuneration. The Articles of a company may, therefore, designate its directors as governor’s members of the governing council or the board of management, or give them any other title, but so far as the law is concerned they are simply directors. The view that "if a person fulfills the functions of a director (whatever they may be) he is to be treated as a director". Unlike under the 1956 Act. This proposition will not hold good under the 2013 Act. The definition, however, presupposes a lawful occupation of the position. Where a person functions as a director without being lawfully appointed, he cannot be treated as a director.
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