Powers And

7/30/2019 Powers And

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PRESENTATION ON

POWER AND DUTIES OF DIRECTORS

PRESENTED BY

MUHAMMAD NAEEM KHAN

JOINT REGISTRARSECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

COMPANY REGISTRATION OFFICE, KARACHI


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The Law recognizes a company, as a legalperson

which in its own rights, is capable of owning

property, making contracts, conducting litigations

and also responsible for doing wrongs. When we

look at these matters from practical angle and at the

way in which this artificial legal person functions; its

corporate will is manifested, its decisions taken and

its acts performed, we see that a company cannot do

any thing at all except through the human beings.


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The business of the Company ismanaged by the Directors who may pay

all expenses incurred in promoting andregistering the Company and mayexercise all such powers of the companyas are not by the Ordinance, or by the

articles, or by a special resolution,required to be exercise by the companyin general meeting.


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Directors act as fiduciaries to the company. Fiduciary duties of directors fall under two general

categories;

(i) duty of care; and (ii) duty of loyalty.

DUTY OF CARE

Under the duty of care, a directors responsibility is toperform his/her duties with the diligence of a reasonableperson in similar circumstances.

DUTY OF LOYALTY

Under the duty of loyalty, a directors fiduciary duty is toact in good faith for the best interests of the company.


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Directors duties arise from the following:

Law/ Rules.

The Memorandum and Articles ofAssociation of the company.

Service agreements specifically entered

between the director and the company. Resolutions passed at members or

directors meetings.


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Allotment of shares (S. 73) Issuance of shares certificates to the shareholders (S.74 to 75) Transfer of shares (S. 76 to 81) Registration of Charges (S. 121 to 136) Maintenance of Registered Office Address (S. 143) Holding of general meetings (S. 157 to 159)

Maintenance of Minutes Book (S. 173) Election of Directors (S. 178 to 180) Appointment of Chief Executive (S. 198 to 203) Appointment of Company Secretary (where applicable) (S. 204A) Maintenance of books of accounts (S.230) Preparation, audit and presentation of accounts in the AGM (S. 233)

Preparation of quarterly accounts by a listed company (S. 245) Appointment of first Auditor (S. 252 to 254) Appointment of Legal Adviser (Companies Appointment of Legal

Advisors Act, 1974)


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The directors of a company may exercise the followingpowers on behalf of the company, and shall do so bymeans of a resolution passed at their meeting, namely:

to make calls on shareholders in respect of moneys unpaidon their shares;

to issue shares;

to issue debentures or1[any instrument in the nature of

redeemable capital];

to borrow moneys otherwise than on debentures;

to invest the funds of the company;

to make loans;


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to authorize a director to enter into any contractbetween the company and associated undertaking formaking sale, purchase or supply of goods or rendering

services with the company;

to approve annual or half-yearly or other periodicalaccounts as are required to be circulated to themembers;

to approve bonus to employees;

to incur capital expenditure on any single item or dispose

of a fixed asset in accordance with the limits asprescribed by the Commission from time to time;


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to undertake obligations under leasing contractsexceeding one million rupees;

to declare interim dividend; and

having regard to such amount as may be determined tobe material (as construed in Generally AcceptedAccounting Principles) by the Board,-

(i) to write off bad debts, advances and receivables;

(ii) to write off inventories and other assets of the company;and

(iii) to determine the terms of and the circumstances inwhich a law suit may be compromised and a claim or rightin favor of a company may be released, extinguished orrelinquished.]


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The company through its Article of associationmay authorize/ restrict the duties of directorssubject to the condition that these restrictions/

authorization are not contrary to the Law e.g.law requires a board resolution for capitalexpenditure and disposal of fixed assets at Rs 1million and Rs 1 lac respectively. However, thecompany through its articles can further restrictthis limit.


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Director shall cause to maintain following registers/ books asprovided under the Law.

Register of transfer of shares (section 76);

Register of buy-backed shares by a company (section 95A);

Register of mortgages, charges etc. (section 135);

Register of members and index thereof (section 147);

Register of debenture-holders (section 149);

Maintenance of Minutes Book (S. 173)

Register of directors and other officers (section 205);

Register of contracts, arrangements and appointments in which

directors etc are interested (Section 219);

Register of directors' shareholdings and debentures (section 220);

Register of deposits(Rule 15/1 of deposit rules);


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THANKS

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