Types of Director in Company

There are various types of Directors appointed in a company for its management of the company. The types of Director in Company are as follow:

1)      First Directors:

Subject to any regulations in the Articles of a company, and the Memorandum of Association, the shareholders or the subscriber shall be deemed to be the Directors of the company till the time Directors are duly appointed in the annual general meeting.

2)      Managing Director:

A “Managing Director” manages the affairs of the company subject to the control of Board of Directors. Such power is entrusted either Articles of Association of a Company or an agreement with the company or a resolution passed in its general meeting by its Board of Directors.

3)       Rotational Directors:

In case of public company or of a private company at least two-thirds of the Directors have to retire by rotation. It refers to such Directors who have to retire (and may, subject to the Articles, be eligible for re-appointment) at the end of his or her tenure.

4)       Whole-time Director:

Whole-time Director is a full-time employment of the company. Such directors are well aware of the company operations and more dedicated in company’s business.

5)      Ordinary Director:

An “Ordinary Director” is a director who takes part in Board meeting and contributes in matters put before the Board. They take part in the meetings of the company. Such directors neither are whole time director or managing director of company.

6)      Additional Director:

An Additional Director is appointed subject to the provisions of the Articles of Association of a Company.  It is the discretion of the Board to appoint Additional Directors. It shall hold office only up to the date of the next annual general meeting of the Company. The no. of additional director along with the board of director shall not exceed the maximum strength fixed for Board of Director by Article of Association.

7)      De Facto Directors:

A ‘de facto director’ is a person who occupies the position of director of a company but who has not been actually appointed as Director but act as a Director. Such persons, although not formally appointed, for the purposes of section 2(1) of the Companies Act, will be treated as a director of the company.

8)      Alternate Director :

When an original Director is absent from the company then Alternate Director can be appointed who acts on a behalf of Director. He is appointed by the Board of Directors of the company and the time period must not be less than 3 months. Such Alternate Director will hold office until such period that the Original Director would have held his or her office.

9)      Professional Director:

These are appointed by Board of Directors for possessing professional qualifications and he /she may not have any pecuniary interest in the company. They are appointed for any expert opinion or advice in any decisions taken keeping in view the interest of company.

10)  Nominee Director:

They can be appointed by certain shareholders, third parties through contracts or by the Central Government in case of any mismanagement.  Nominee Directors must be particularly act in the best interests of the company and its shareholders as a whole. In case of a One Person Company a nominee Director is nominated by the sole Director of the One Person Company to manage the OPC in case of death or incapacitation of sole Director.

11)  Executive Directors:

These Directors of the company who are involved in the day to day management of the company. They have specific titles within the company, for example, managing director, finance director, marketing director etc.

12)  Non-Executive Directors:

They are not involved in the day to day management of the company and are appointed from outside the company. The reason behind appointing non-executive directors is that they can bring an independent voice and perspective to the board.

Author: This blog is written by  Ms. Chanchal Sharma, a passionate blogger of Aapka Consultant.

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