Powers Of Shareholders And Directors: A Brief Recapitulation

Introduction

The shareholders being the owners of a company, appoint directors in a company and directors acting as agents of a company play a significant role in effectuating the business operation of a company and taking key managerial decisions in accordance with the Memorandum of Association ("MOA") and Articles of Association ("AOA") of the company. There are various statutory provisions with respect to appointment, removal, meetings, and powers of the directors under the Companies Act, 2013 (the "Act"). It is important to focus on the powers of the board of directors and shareholders as disputes among the board of directors may arise from time to time.

To have a better understanding of the concept, let us understand this through a hypothetical situation. For instance, in XYZ private limited company (the "Company") there are three directors "A", "B" and "C". "A", being an NRI is also the majority shareholder in the Company, "B" is the minority shareholder