Directors

Q-01:”Directors of Companies are not trustees”-Explain the statement.

Ans. for Q-01:

Directors as trustees: Directors can be considered as trustee of the company. Directors are appointment by the shareholders with the powers and duties to manage the business of the company. The conducts of the directors are supposed to be governed by the articles of association of the company.

First of all directors are trustees as regards the properly of the company which in to their hands or under their controls. Although directors are not properly speaking trustees’ .yet they have always been considered and treated as trustees of money which comes to their hands.

Seconds of Directors are trustees in case of use the power of the company. They work for the company interest and not for their particular interest.

Third of there is a fiduciary relationship between the company and the directors, so they are the trustee of the company. A director must not make a secret profit out his office. Directors are bound to disclose such profit and returned to company.

Directors’ are not trustees: Directors are not properly speaking trustees due to following limitations-

1. A trustee is a person who is not owner of the properly, but as a shareholder directors are the owner of the company.
2. When nay contract made by the directors on behalf of the company is in name of the company, but a trustee made any contract in his own home.
3. The Control and management of the company is vested entirely on the directors. They have the interest in it. But the trustees have not any interest for the control of the properly of the company;
   Since the position of a director is not exactly that of a trustee,but they hold the position which coincides with that of a trustee, so his position may will be said as “Quasi Trustee” to the company and its properly and money.
   
   
   Q-02: Mention the corrective steps necessary for the following lapses by company:
   
   

1. Failure in filling the return of allotment;
2. Non-Payment of dividend declared in the AGM;
3. Non-Filing of consent to act by a director; and
4. Non-acquiring of qualification share by a directors in time.
   
   
   Ans. for Q-02:

1. Failure in filing the return of allotment:
   The company must file with the registrar a return of allotment within sixty days (60) after allotment according to section 151 . If a company defaults in complying with the requirements of this Section, every officer of the company who knowingly a party to the default shall be liable to a fine not,excluding one thousand taka for every day during which the default continues.
   
   
   Provided that in case of default in filling with the registrar within the time , any document required to be filed by this section, the company or any person liable for the default may apply to the court for relief and the court if satisfied that the commission to file the document was accidental or due to inadvertence or that on other grounds it is just and equitable to grant relief ,may make an order extending the time for the filing of document for such a period as the court may think proper.
   
   
2. Non-Payment of dividend declared in the AGM:
   Dividend is the share of profit payble to the shareholders, once it is declared it becomes a debt which must be paid and disbursed within two months from the date of declaration .
   The company is obliged to send dividend to the registred addresses of the shareholders,Once the dividend is paid out ,the liability on companys part is discharged.
   If a shareholder fails to collect the money from the company account,for whatever reasons, It is a lapes on his part ,A dividend unclaimed at the hands of a shareholders is an arrear dividend.
   The company usually keep the unclaimed and unpaid dividends in a sparate account and such account is shown as a current liability in the annual Balance sheet of the company.
3. Non-Filing of consent to Act by a director:
   
   
   Every person proposed as a candidate for the office of a director shall sign ,and file with the company his consent in writing to act as a director,if appointed.
   
   
   A person shall not act. As a director of the company unless he has within thirty days (30) of his appointment signed and filed with the registrar his consent in writing to act as such director.
4. Non-Acquiring of qualification share by a directors in time :
   A contact of directors to take qualification share must be filed with the registrar or sign the memorandum of association by taking qualification shares.
   
   
   If he is not already qualified he shall obtain his qualification within sixty days (60) after hes appointment or such shorter time as may be fixed by the articles section 97(1).
   
   
   Any unqualified person acts as director of the company he shall be liable to fine not exceeding two hundred taka for every day between the expiration of the said period and last day on which it provided that the acted as a director,[Section 97(2)]
   
   
   Q-03: Narrate the provision of companies act’1994 about appoint of directors quoting appropriate section.
   Ans. for Q-03:
   There are certain mandatory provisions which must be abserved while appointment of directors in the case of public limited companies. For private companies ,it is usual that the articles provide the mode of appointment of the directors. But they have to took for the provisions applicable both for public as well as private companies.
   The provisions for appointment of directors in public limited companies are :
   Nos of Directors :
   Sec. 90 (1) Every company shall have at least three directors.
   Natural person :
   Sec.90(3) Only natural persons can be appointed directors.
   AGM :
   Sec.90(1)(b) The directors shall be appointed by the members in general meeting.
   Casual vacancy filled :
   Sec.91(1)(c) Casual vacancy may ,however,be filled up by the directors’
   Rotation :
   Sec.91(2) The duration of office of a director shall be liable to determination at any time by retirement in rotation.
   Consent writing:
   Sec.92(1)(a) A consent in writing by persons to act as directors must be field with the registrar.
   Qualification shares & sign MA :
   Sec.92 (1)(b) A contrct of directors to be take qualification shares must be filed with the registrar or sign the memorandum of association by taking qualification shares.
   Sign consent proposal for :
   Sec.93 A sign consent to act as director should a company the proposal for directorship to the company.
   Nos of Allternate director :
   Sec.101 A director a way from Bangladesh for a consecutive period of at least three months may appoint his alternate director if So authorized by the article or by a resolution of the general meeting.
   Register of director all individual particulars any other directors :
   Sec 115(1) A register of directors shall be maintained in which shall be entered all individual particulars of directors including their any other directorship.
   Return within 14 days :
   Sec.115 (2) A return is to be filed with the registrar within fourteen days of appointment of directors. Every subsequent changes in the directorship must be supported by like ,returns within a period of fourteen days of such.