DUTIES AND RESPONSIBILITIES OF A DIRECTOR IN COMPANY

As a director of a company, you have a wide range of responsibilities. In this presentation, we'll explore the key legal and fiduciary duties, regulatory compliance requirements, business planning and strategy development responsibilities, financial oversight and management, and stakeholder management duties that are part of your job as a director.

Legal Duties of a Director

Fiduciary Duties of a Director

Duty of Care
Duty of Loyalty
Duty of Good Faith

Business Planning and Strategy Development Responsibilities

Director responsibilities has a part of the company

1. Business Registration	Business Structure Business Name Registration Tax Registration Industry-Specific Licenses and Permits State and Federal Registrations Financial Information
2. Tax Filings	Income Statement (Profit and Loss Statement) Business Income Tax Return Balance Sheet Deductions and Credits Sales Tax Returns
3. Financial Statements	Income Statement Balance sheet cash flow statement Statement of Retained Earnings
4. Annual Reports	Letter to Shareholders Business Overview Management Discussion and Analysis Financial Statements Corporate Social Responsibility (CSR) Report Financial Highlights
5. Employment-Related Filings	Employment Contract Form I-9 (Employment Eligibility Verification) Employee Handbook Termination Documents Equal Employment Opportunity (EEO) Reports Occupational Safety and Health Administration (OSHA) Forms
6. Corporate Governance Filings	Board of Directors Composition Board Committees Share Ownership and Trading Policies Code of Ethics and Conduct Related Party Transactions Major Shareholders Compliance with Listing Standards
7. ROC Compliances	Annual Return Financial Statements Director's Report Annual General Meeting (AGM) Notice Changes in Company Structure Appointment/Resignation of Directors Compliance Certificates

As a company director, it is crucial to ensure the maintenance of a significant portion of the company's compliance.

Compliance	Description
Commencement of business ( within 180 days)	For companies registered in India after November 2019, having a share capital, it is necessary to obtain a commencement if business certificate before commencing any business or exercising the borrowing powers. The commencement of business certificate must be obtained within 180 days of incorporating a Company. In case the individual fails to obtain this certificate, there is a penalty of Rs. 50,000 for the company Rs. 1000 per day for the directors for each day of default.
Auditor Appointment (Within 30 days)	Every registered Indian company is obligated to designate a statutory auditor within 30 days of its incorporation. Failure to do so will result in the company being prohibited from commencing business operations. Additionally, the company will incur a penalty of Rs. 300 per month for non-compliance.
Income Tax Return	Income tax returns must be submitted by the 30th of September every Assessment year.
MCA Form AOC-4	Private limited companies that are registered must submit MCA Form AOC-4 by the 30th of November each Assessment year. Not doing so will result in a penalty of Rs. 200 per day for each day of delay.
MCA Form MGT-7	You must submit MCA Form MGT-7 by December 31st, every Assessment year. If you fail to do so, you'll be charged a penalty of Rs. 200 for each day of delay.
DIN eKYC	All the directors of the company must be filed for the DIN eKYC or DIR-3 eKYC. In DIR-3 eKYC, the Director must provide a unique personal mobile number and a personal email address. There's a penalty of Rs. 5000 in case of failure to file DIN eKYC.
Hold Annual General Meeting	For a private limited company, it is mandatory to hold an annual general meeting once a year. Companies are required to keep their AGM within six months from closing the Financial year.
Director's report	Preparation of the Directors report will be done with all the information required under Section 134.

Income Tax Compliances

Quarterly payment of the advance tax
Filing of the Income Tax returns
Tax audit (mandatory in case the turnover or gross receipts of a business exceeds Rs. One crore in the previous year relevant to the assessment year.)
Filing of the Tax Audit report.

OTHER EVENT-BASED COMPLIANCES

Apart from the yearly paperwork, directors are responsible for ensuring that the company complies with other requirements whenever certain events happen.Change in the authorized capital or the paid-up capital of the company.

Allotment of new shares or transfer of new shares
Giving loans to other companies
Giving loans to directors
Appointment of managing or whole-time Director and their payment
When a bank account is opened or closed, or there is a change in the signatories of a bank account.
If there is an appointment or change of the statutory auditors of the company

Therefore, it's essential for Company Directors to ensure timely compliance with these responsibilities.

Accounting

All companies are required to maintain accounts and prepare financial statements at the end of each financial year. Our Compliance Director will help your company maintain accounts and will prepare the financial statement for your business at the end of financial year.

Secretarial Services

Companies are required to conduct a minimum of four board meetings, an annual general meeting, Directors Report and Annual Report each financial year.

MCA Annual Return Filing

Annual General Meeting should be held by a company within 6 months from the end of that financial year. And MCA annual return must be filed on or before September 30th. Our Compliance Manager will prepare all the documents and file your company’s MCA annual return.

Income Tax Return Filing

Income tax return of a company must be filed irrespective of income, profit or loss. Hence, even dormant companies with no transactions are required to file income tax return each year. Our Compliance Manager will prepare all the documents and file your company’s income tax return.

Directors in a company have several key responsibilities, primarily aimed at ensuring the company operates legally, ethically, and in the best interests of its stakeholders. Above are the major compliances to be taken by the Company Director.

Management of Stakeholders

Employee Management

Manage and motivate employees to achieve work targets

Shareholder Communication

Communicate with shareholders effectively and act in their best interests.

Collaboration with Partners

Foster effective collaboration with partners, including suppliers, customers, and other stakeholders.

Disclaimer:

“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation.”

Prepared On:
17/10/23