Shadow director

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Jai

Jai (Querist)
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20 March 2009 Who is a Shadow director? What is his role in the company? How is he different from the other directors?

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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20 March 2009 section 741. (1) od C' Act says “director

(2) In relation to a company, “shadow director” means a person in accordance with whose directions or instructions the directors of the company are accustomed to act.
However, a person is not deemed a shadow director by reason only that the directors act on advice given by him in a professional capacity

Holder of controlling or majority stock (share) of a private firm who is not (technically) a director and does not openly participate in the firm's governance, but whose directions or instructions are routinely complied with by the employees or other the directors. In the eyes of law, he or she is a de facto director and is held equally liable for the obligations of the firm with the other de facto and de jure directors.