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Question
Justify the following statement:
Directors play a triple role.
Solution
(a) Directors work in triple capacities viz;
i) as an agent.
ii) as a managing partner
iii) as a trustee.
As agents, the directors can enter into contracts, sign agreements or contracts, carry on the business, and perform all the other duties. As agents, they must act within the scope of their authority and in the name of the principal i.e. the company.
(2) As a managing partner, directors are entrusted with managerial powers. As a managing partner, they perform almost all the proprietary functions like the issue of shares, allotment of shares, making calls, forfeiting shares, etc. The directors are considered as trustees of the company. They stand in a fiduciary relationship with their company. As a trustee, the directors look after the property, money, and other assets of the company.
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