'It is not easy being a director.' Comment.

Essay by ringaringUniversity, Bachelor'sA-, September 2006

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Under Section 4 of the Companies Act, a director includes "any person occupying the position of director by whatever name called; and a person in accordance with whose instructions the directors are accustomed to act; and an alternate or substitute director." The definition of a director can include those formally appointed, and those who are not. Section 145 states that "No person other than a natural person of full age and capacity shall be a director of a company." Disqualification occurs where a person is a bankrupt under s 148, convicted of a offence involving fraud or dishonesty punishable with imprisonment for 3 months or more under s 154(1) or is a persistent defaulter in relation to delivery of documents to register under s155. However, the disqualified director (other than being disqualified under s 154(1) or s 149A) can then apply to court for leave to be involved in the management of the company.

It demonstrates how simple it is to become a director given the minimal requirements required for the qualification of a director. However, the carrying out of duties expected of a director and maintaining the position of a director is certainly not effortless. Moreover, care must be taken by directors to abstain from committing breach of duties which may result in imprisonment or fines. Being a director is therefore not as easy as it seems.

Previously, the Board of Directors ("BOD") had less power and directors were viewed to be merely agents, subject to the members' overriding control. Now, modern law recognises the board as an organ of the company that has the powers to bind the company with respect to the matters within the scope if its authority. Given that a director has more power now, the duties which are expected from him and the...