Question

Distinguish between the following:

Director and Managing Director

Answer 1

Sr. No.	Director	Managing Director
1.	An elected representative of the shareholders who is elected for directing, governing or controlling the policy or management of a company is called a Director.	A Director who is appointed from “amongst the Directors as a Chief Executive Officer and entrusted with the substantial powers of management is Called a Managing Director.
2.	A Director is elected and appointed by the shareholders at the Annual General Meeting.	A Managing Director is appointed Directors from amongst themselves.
3.	A person can act as a director in 20 companies at a time out of Which not more than 10 public companies at a time.	A person can act as a managing director of 2 companies at a time by resolution by the Board of 2nd company.
4.	The period of his term is 3 years and the Director is required to retire after 3 years of his appointment by rotation.	He is appointed for a maximum period of 5 years at a time and is not subject to retirement by rotation as long as he holds his office.
5.	Directors are given remuneration if there is a specific provision to that effect made in the Articles. Directors are given fees to attend Board meetings which may be up to Rs 1 lakh and other prescribed remuneration.	The managing director is entitled to get a monthly salary or a 5 percent commission on net profits earned by the company.
6.	A Director works in only one capacity, i.e. as a Director.	He works in two capacities, v12. that of a Director and that of a Managing Director.