Manager
Definition:
As per Section 2(53) of the Companies Act, 2013,
“manager” means an individual who, subject to the superintendence, control and direction of the Board of Directors, has the management of the whole, or substantially the whole, of the affairs of a company, and includes a director or any other person occupying the position of a manager, by whatever name called, whether under a contract of service or not
Overview:
A ‘manager’ is an individual who, subject to the superintendence, control and direction of the Board of Directors, has the management of the whole, or substantially the whole, of the affairs of a company.
While a managing director has the substantial powers of management, a manager has the management of whole or substantially the whole of affairs of the company. A person who is a manager, and also a director of the company, he in fact is the managing director of the company.
As per the provisions of Section 196 of the Act, a manager and a managing director cannot be employed at the same time in a company.
A person entrusted with the business of a branch is not a manager, since he does not have the control over the affairs of the company as a whole and his duties are confined within certain prescribed limits. Unless the person is in overall in-charge of the entire business of the company he cannot be deemed to be a manager.
Where a person is not designated as manager but he occupies the position of the manager, by whatever name called, would be regarded as manager and he may or may not be under a contract of service, ie. an employee of the company.
On the question whether a factory manager is a manager, it has been clarified by the Department of Company Affairs that factory manager in charge of production but not concerned with the buying of raw materials or selling of finished products and not having control over the company’s finances would not be a manger.
Managing Director
Definition
As per Section 2(54) of the Companies Act, 2013,
“Managing Director” means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called.
Explanation:
For the purpose of this clause, the power to do administrative acts of a routine nature when so authorized by the Board such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on account of the company in any bank or to draw and endorse any negotiable instrument or to sign any certificate of share or to direct registration of transfer of any share, shall not be deemed to be included within the substantial powers of management
Overview:
Managing director is a director, who, by virtue of an agreement with the company, or by virtue of a resolution of board of directors, or a resolution passed in the general meeting, or by virtue of memorandum or articles of association of the company is entrusted with substantial powers of management which would not otherwise be exercised by him.
It has been clarified as to what does not amount to substantial power. These include the power to do administrative acts of a routine nature when so authorised by the board such as the power to fix the common seal of the company to any document or to draw and endorse any check on account of the company in a bank how to draw and endorse any negotiable instrument or to sign any certificate of share auto direct registration of transfer of any share.
Substantial powers: The institution of the suit on behalf of the company by the managing director is deemed to be within the meaning of the expression ‘substantial powers of management’.
Search power is necessary and incidental for managing the day-to-day affairs and business of the company. Therefore, the contention that the managing director has no authority to file a suit is untenable, and a suit filed by the managing director without any authorisation from the board of directors cannot be said to be bad in law – Wasva Tyres v Printers (Mysore) Ltd [2008] 86 CLA 455 (Kar.)
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