Act as director

Querist : Anonymous (Querist) 03 June 2010 This query is : Resolved
Can a Practicing Advocate act as director of a compnay.

If yes? What legal action take in case of defalut of company

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A V Vishal (Expert) 03 June 2010
Yes an advocate can be a non executive director of a company.

Querist : Anonymous (Querist) 04 June 2010
Thanks Mr. Vishal.

I wants to know, which legal action take against director in case of default of the company under any law. such as

1. Bar Council has power to withdraw certficate of practice.

2. How much financial liability will be arise.

3. Punishment like, Judiacial Custody, Prison etc..

Heaven 2011 (Expert) 04 June 2010
Dear Sir,

As you would be aoointed as the non executive director any law generally does not imose hefty burden upon the concerned director. Generally the role of a non executive director is to attend the Board meeting and committee meeting and to accept the sitting fees. Unless and until and grave condition arise on account of the act of the NED and which appears to be detrimental to the interest of the company the NED is not generally awarded with imprisonment etc. However post Satayam the scenario is going to be changed. So far the other aspects are concerned the the director may come within the ambit of Section 274, 284 and section 397/398 of the Companies Act these may amount to cpopounding of offences u/s 621A of the Companies Act.
Regards.

A V Vishal (Expert) 04 June 2010
What are the facts in your case?

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