Appointment of Directors
The directors regulate corporate affairs of the public limited company. They are responsible for formulating plans, policies, and strategies. Shareholders, those are appointed as the director or manager of the company, are appointed by different parties. In the Companies Act, 1994 it is said that Public Limited Company must have minimum Three and Private Limited Company must have minimum two directors. Appoint process of the directors are given bellows:
Appointment by Promoters: Initially promoters appoint the directors or they become directors. They are enlisted in Memorandum of Association and Articles of Association. Initial directors are self-appointed and they resign after the first General Meeting.
Appointment by Shareholders: Initial directors retire in the first general meeting: and then shareholders elect directors by arranging a vote. This kind of appointment process is described in Articles of Association.
Appointment by Board of Directors: Sometimes the board of directors can appoint new directors in blank posts according to the Articles of Association.
Appointment by Managing Agent: According to the Articles of Association, management can appoint minimum two directors.
Appointment by Government: By the application of shareholders government can appoint directors, in the Companies Act 1994; this kind of power has given.
Finally, it can be said that directors of the company are appointed and resigned according to above mentioned process.