Understanding the Director's Legal Status
The legal position of a director within a company is crucial for understanding their responsibilities and authority. Let's analyze the given statements:
Statement Analysis
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Statement 1: A director of a company as a director is a servant of the company
This statement is incorrect. Directors are typically considered officers or agents of the company, not mere servants. They possess decision-making power and manage the company's affairs, unlike servants who work under direct control.
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Statement 2: A director is an agent of his company
This statement is correct. Directors act on behalf of the company, exercising the powers conferred upon them by law and the company's constitution (like the Memorandum and Articles of Association). They bind the company in contracts and dealings, similar to how an agent acts for a principal.
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Statement 3: A director is not a fiduciary person of his company
This statement is incorrect. Directors owe significant fiduciary duties to the company. These include duties of loyalty, good faith, avoiding conflicts of interest, and acting in the best interests of the company.
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Statement 4: A director is master of his company
This statement is incorrect. The company is a separate legal entity. While directors manage the company, they do not own it or control it in the sense of being its 'master'. They are accountable to the company (represented by the shareholders and the board).
Conclusion
Based on the analysis, the only correct statement is that a director acts as an agent of the company.
Correct Option: B
Important Questions from Company law
Arrange the following as per sections of the Companies Act, 2013 in descending order :
A. Execution of Bills of Exchange, etc.
B. Punishment in case of repeated default
C. Annual reports on Government Companies
D. Petition for winding up
E. Functions of Company Secretary
Choose the correct answer from the options given below:
Match List I with List - II.
List - I
List - II
(A)
Producer companies
(I)
Do not necessarily require Memorandum of Association
(B)
Statutory companies
(II)
Association not for profit
(C)
Section 8 company
(III)
Formed to convert cooperative into a company
(D)
Small company
(IV)
Paid up share capital is between 50 lakh-5 crore and turnover is between 2 crore - 20 crore
Choose the correct answer from the options given below:
Red herring prospectus is a prospectus issued:
- The problem of double taxation in international transactions can be reduced by:
i. Market agreement
ii. Multilateral agreement
iii. Bilateral agreement.
iv. Trade agreement - Under the Companies Act 2013, which of the following company is required to constitute a Corporate Cocial Responsibility Committee?
(a) company having networth of Rs. 500 crore or more
(b) company having turnover of Rs. 1000 crore or more
(c) company having net profit of 5 crore or more
(d) company having net profit of 2 crore or more during any financial year
Choose the most appropriate option :
