Director, duties, Punishment, Liabilities

1. PRESTIGE
INSTITUTE OF
MANAGEMENT
GWALIOR
PRESENTED BY:-
Devendra Singh Rathore
Meghna Sharma
SESSION
2015 - 2017

2. Duties & Liabilities of Director

3. CONTENTS
Director
Director’s duties
Punishment for contravention
Director’s Liabilities
Conclusion

4. DIRECTOR
• Companies Act, 2013 does not
contain any exhaustive
definition of the term.
• Covered under Section 2(34) of
the act.
• It defines as “ a director
appointed to the Board of a

5. INTRODUCTION TO
DIRECTOR’S DUTIES
–Covered under section 166
.
–Defined first time under the
act.
–Applies to all categories of
directors, including

6. DIRECTOR’S
DUTIES
– Act in accordance with the articles of
the company.
– Act in good faith as well as for the
best interests of the company and
company’s related parties.
– Exercise his duties with due and
reasonable care, skill and diligence.
– Shall exercise independent judgment.

7. CONTINUED
– Not involve in a situation in which he
may have a direct or indirect interest
that conflicts, or possibly may conflict,
with the interest of the company.
– Not achieve or attempt to achieve any
undue gain or advantage either to
himself or to his related parties.
– Not assign his office and any
assignment so made shall be void.

8. PUNISHMENT FOR
CONTRAVENTION
–Punishable with a fine
which shall not be less
than Rs. 1,00,000 but
which may extend to Rs.
5,00,000.

9. DIRECTOR’S
LIABILITIES
–Liability for illegal acts.
–Director receiving secret
commission or bribe.
–Liability for breach of
warranty of authority.

10. CONTINUED
–Liability in respect of
breach of trust.
–Liability for personal
profits.

11. CONCLUSION
Becoming a company director has become
a very serious business and should not be
undertaken lightly or unadvisedly. If you
are invited to become a company director
or are already a director, it is very
important that you understand your duties
and responsibilities and the potential
consequences of their breach.