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Justify the following statement: Directors are Managing Partners.

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Question

Justify the following statement:

Directors are Managing Partners.

Justify
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Solution

  1. Directors represent owners of the company Viz. shareholders. As the Directors are elected representatives of the shareholders, they are entrusted with vast managerial powers. Being primarily shareholders, they are like partners with the other shareholders. In that relation, the Directors are regarded as the most active and managing partners and other shareholders as sleeping or dormant partners.
  2. As managing partners, the Directors perform almost all the proprietarily functions like the issue of shares, allotment of shares, making calls, forfeiting shares, etc. However, their acts are not binding on the shareholders or on each other unless the Articles provide so. 
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Key Managerial Personnel (KMP)
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Chapter 6: Directors and Key Managerial personnel of a company - EXERCISES [Page 101]

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Balbharati Secretarial Practice [English] Standard 11 Maharashtra State Board
Chapter 6 Directors and Key Managerial personnel of a company
EXERCISES | Q 6. 1) | Page 101

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