Private limited company-directors report

Hello Jayanta,

After going through your query concerning the situation that you have mentioned above. Here, I would like to provide you with some bits of advice with relevant cases, that might help you out.

The question that arises here is about the procedural validity when the directors are trying to address the shareholders, which in this case, are themselves.

As far as I know, the Companies Act, of 2013, doesn’t specifically prevent any directors of the company from also being the shareholders, until the provisions and rules mentioned in the said act are followed. They have the right to address all the meetings and perform all the necessary works which are necessary for the company, but all this must be in writing for the maintenance of legal sanctity.

As per the provisions of the Companies Act, of 2013, the dual role is permissible to the directors that they can also be the shareholders, but it should be strictly followed by the statutory guidelines of the company along with a proper maintenance of the corporate governance.

Provided that other necessities like board meetings per year, minutes of meetings, etc. as all these things tend to maintain transparency in decision-making, even when the same individuals are both directors and shareholders.

In the case of Re Duomatic Ltd (1969), it has been seen that the decisions made by the directors are valid even if they are the shareholders also, provided that the consent must be genuine and the documentation is completed properly.

I hope I was able to provide you with the answer to your query. If you need further clarification, please feel free to connect with me on LinkedIn. (www.linkedin.com/in/pankhuri-rastogi-9221b2289)

Thank You.