Directors and Officers Liability
Bala Balakrishnan, In-House Counsel, Symbiosis Institute of Business Management, India
Companies are incorporated under the respective laws of the country to create a separate legal entity – an artificial personality – but they cannot act on their own. They need people to make decisions and manage the company. These people are the directors under the respective statutes of the country and manage the company. Under the Companies Act 2006 of UK vide and under the Indian Companies Act, 1956 the definition of director is spelled out as “person occupying the position of director by whatever name called”. A director is an officer of the company and is an agent of the company and the directors are at the senior most level of a company’s management with the right to take part in the board of management. The directors are appointed by the shareholders of the company entrusting the responsibilities to manage the affairs of the company.
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