Use of designation as director

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2017 Can an employee be designated as Director viz. Production Director/Sales Director etc. even if he is not appointed as director in of Board of Directors. Kindly clarify position under Companies Act 2013.

CS Sanchita Bhardwaj

CS Sanchita Bhardwaj (Expert)
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05 June 2017 A director can be appointed on Board only. Also, an employee can be non-executive director and not executive.

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2017 Dear Mam,
The question is not related to appointment of a director in BOD but to designate an employee as director, who is not a member of BOD. Company wants to designate its senior employees as director- finance, director - production, director - operational. Can it do so as per provisions of Companies Act 2013? it would be really helpful if you can share relevant provisions/ circulars.

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CS Sanchita Bhardwaj

CS Sanchita Bhardwaj (Expert)
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05 June 2017 In my view, there is no such thing as designating as director. Both are same -designating and appointing. since the word 'director' is covered under CA 2013, you must follow appointment rules. Else, you may proceed with any other designation.

Querist : Anonymous

Querist : Anonymous (Querist)

07 June 2017 As per Companies Act 2013 ―"director" means a director appointed to the Board of a company. What is the position in case someone is not appointed on the board yet called/ designated as director?
An employee, who is not appointed in the board and yet he is called as 'director production or director -sales'. is it non-compliance of provisions of Companies Act?
Does a company not have designations like this? (Earlier there was a circular NO.2/82, DATED 20.1.1983 under Companies Act 1956 in this regard, what is the position under companies Act 2013?)