Corporate Law, Income Tax, Service Tax, Customs, Excise, GST, RBI SEBI MCA Updates, Start-ups, Listed Company Compliance, Company Incorporation, Regulatory News, Indian Law, Legal Terms, Judicial Law, Board and Shareholder Meetings, Accounting, Foreign Investment, Government Policies, Resolutions, Auditing, Directors, Promoters, Share Capital, Initial Public Issue IPO, Trademark, Patent, Copyright, Trusts, Partnership Firms, LLPs, Private Company, Public Company, Stamp Duty, Stock Exchange.
Receive Daily Updates by Email (Free Subscription)
“Board of Directors” or “Board” of a Company
Definition of “Board of Directors” or “Board” under the Companies Act 2013
In accordance with the section 2(10) of the Companies act 2013, “Board of Directors” or “Board”, in relation to a company, means the "collective body of the directors of the company".
Need of Board of Directors
A Company is not a natural person like the humans, which could operate on its own. It is considered as a Natural Person. It needs some governing authority, which would have the power to operate it. In small companies, with low level of operational activities and limited shareholder, mostly the shareholders constitute the Board of that Company. But a Company having many shareholders generally elects, personnel having vital experience in various functional/operational areas, to the Board of Directors of the Company.
Constituents of Board of Directors
After the incorporation of a Company, unless otherwise some new directors election, the first directors of the Company comprise the Board of Directors of the Company.
Subsequently, the following types of Directors can be a part of the Board of Directors of the Company:
(1) Managing Director
(2) Whole-time Director
(3) Additional Director
(4) Alternate Director
(5) Nominee Director
(6) Special Director
(7) Professional Director
Though substantial power is relied on the Board of Directors of a Company, still a Company and its Board can not be construed as the one and same. In the eye of law, a Company has its separate legal identity.