Business Report: Roles of Directors, Shareholders, and Capital

This business report provides an in-depth analysis of key aspects of corporate governance and finance. It begins by examining the roles and responsibilities of company directors, including their appointment, qualifications, and duties, as well as their relationship with auditors. The report then delves into the analysis and evaluation of shareholders, including their rights and obligations, and the concept of share capital. Finally, it identifies and discusses various methods of raising capital, including equity, debt, and specialty capital, providing a comprehensive overview of how businesses can secure funding for their operations and growth. The report emphasizes the importance of understanding these elements for the successful management and financial stability of a company.

Business

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Identification and discussion about the roles and powers of the directors..................................1
Analysis and evaluation of the shareholders...............................................................................4
Identification of methods from which capital can be raised........................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business is an important aspect and it includes a number of different aspects that helps a
firm to capture a larger share of market and stand well ahead of all the other competitors that are
prevailing in the industry in which it is operational (Abbasi, Ali and Bibi, 2018). This
presentation includes a variety of factors starting from the roles and responsibilities of a director
that includes their appointment, qualification, disqualification, etc. Apart from that the
presentation also covers an elaborated discussion of all the shareholders and their detailed
analysis so that it can help the firm to analyse its position in the market. Further the presentation
includes discussion of various methods from which capital can be raised and how they are
applicable in the industry in the long run.
MAIN BODY
Identification and discussion about the roles and powers of the directors
A director is a representative of a corporation’s shareholders as specified in clause 66, or
perhaps an alternative panel of directors and encompasses anyone who holds the post of director
or alternative director under any title. All directors must be aware of respective statutory
obligations. Specific scope of work must be in place to complement respective responsibilities. It
may well be advisable to appoint a Chairman to supervise and manage the safety and security
administration framework based on the extent scope, and environment of the company, as well as
the possible dangers and risks that may arise (Ansong and Boateng, 2019).
Appointment- Many sorts of directors are there in corporations, as well as many sorts of
businesses, but there are some necessary requirements that require firms to nominate specific
kinds of directors in specific firms. A director is defined as a person who is appointed as a
director of a company under Section 2(34) of the Act. Under the provisions of, this Article an
individual who has been nominated and not identified as a director wasn’t regarded a director
(Anwar, 2018). Since it would be hard to define roles and obligations in corporations and
businesses, just one person would be qualified to be nominated as a director. Minors are
ineligible to be directors due to their inability to acquire a DIN (Section 152(3)). At least two
directors must be an Indian citizen, according to Section 149(3). In the instance of a government
corporation, there are three, a private firm two, as well as an one-person business one. Although
this corporation's content may call for a greater level of integrated graphics. The highest number

of members is 15, though a qualified opinion may assign additional. In governmental companies
and companies authorized under section 8 pursuant to conditions, a separate decision is not
required (Weissbrodt, 2017).
Qualifications- The Act provides a specific clause, Section 162, and outlines the grounds
why an individual might not have been appointed as a director. There really is no such
requirement in the Act governing qualifications. However, the following needs can be
mentioned-
 The individual should have reached the age of 18 or older (Arnold, Kiel and Voigt,
2016).
 It doesn't matter if you're Indian or not.
 The individual must have their own Digital Signature Certificate (DSC), that will be used
to acquire the Director's Identification Number (DIN).
 The individual must sign a formal letter stating that the person is not an ineligible
participant and that he or she is willing to act in the capacity of Director (Arnott, Lizama
and Song, 2017).
 A person that wishes to become a corporate director does not need to have any academic
qualifications.
Disqualifications- Under different sections disqualifications are as follows-
 Any individual who had been deemed a man of unsoundness of brain by a trial authority
would not be eligible for a chairmanship in the firm.
 An individual is bankrupt if he or she possesses unpaid debts or if a petition to be
declared bankrupt is ongoing in judgment (Arteaga and Menéndez-Requejo, 2017).
 The individual has been convicted of the felony punishable by imprisonment by the
tribunal. If the term for same is longer than 6 months, registration will be deferred until 5
years have passed since the term was served.
 If the act carries a penalty of more than 7 years, then the person will be unable to serve as
a director in any corporation.
 A supreme authority issues a judge ordered the individual's exclusion, and the individual
is unable to be a director while the decision is in effect.
 The defendant has neglected to make the payment owing on the stocks, and it has been
more than 1⁄2 a year since he has done so (Barnett, 2019).

 Within previous, 5 years the individual has indeed been engaged in a partnership firm
(Wang, Pauleen and Zhang, 2016).
 An individual could be joined the board of directors until he has been assigned a
Director's Identification Number (DIN).
Duties- Under Section 166, imposes the essential responsibilities and obligations on
company directors-
 A corporation's director must behave in conformity with the articles of Association
(AOA).
 A corporate director must act with integrity in effort to encourage the firm’s objectives
for the advantage of the organization overall, and even in the national intrigue of the
business's investors (Duan, Cao and Edwards, 2020).
 A corporate director must apply professional audit and apply necessary and
professionalism, competence, and attention in carrying out his obligations.
 A commercial director must never be involved in either circumstance wherein it may well
have a personal or oblique stake that competes, and may clash, with the business's
interests.
 A business director may not obtain or seek to obtain any excessive benefit or benefit for
oneself, his family, colleagues, or acquaintances, but if such a director is actually
convicted of obtaining any excessive profit, he will be liable to pay the firm an equivalent
amount to that profit.
 A corporation director may not transfer his or her office, and any such transfer is invalid.
 If a corporate director violates the requirements of this clause, the director will be fined
(Gardner, 2016).
Relationship with auditor- The relation of a director and auditor is very crucial as each
one of them is integral part of the company and thus a firm cannot perform well without them.
Thus it is very important that they maintain of corporation and the director must provide the
required documents as and when required by the auditor so that analysis and evaluation of the
company can be done in a very precise manner and thus it can add to the long term value of the
firm in the long run (Wagner, 2016).

Analysis and evaluation of the shareholders
A stakeholder is a firm or person that owns at minimum one unit of the organization. These
people and organizations expect to earn if the business in that they own shares performs well, but
they often risk losing revenue if the firm doesn't really perform excellently (Gupta and Sharma,
2016). Although stockholders constitute basically the corporation's proprietors, individuals really
aren't liable for the corporation's economic responsibilities, such as liabilities. Furthermore,
investors have really no say inside the corporation's day-to-day activities, but they do get a
voting on administrative concerns. Stockholders are another term for shareholders.
Rights and obligations- There are a number of different rights and obligations that
shareholders possess and thus it is very important to study them in detail and thus it are
elaborated below-
 Every unit of worth has been purchased and fully paid up, subject to all exemptions
granted by law, gives the owner the following rights (Madina, Zamora and Zabala, 2016).
 To actively take part in stockholders' annual assembly.
 To get relevant facts to exercise one's political representation, as well as information
about the voting outcome at the Annual Assembly of the company.
 To participate at the Annual Shareholders’ assembly and vote.
 To be paid the earnings that owe (Ünal,Urbinati and Chiaroni, 2019).
 Preferential option to subscribe for freshly released units Right to equitable
representation for all stakeholders of the very identical category; or any other rights
conferred by law and these Certificate of Association.
 Shareholders must use their entitlements in good conscience while respecting the
corporation and other owners' legal legitimate interests (Mejri, MacVaugh and Tsagdis,
2018).
Share capital- The revenue generated by a firm via the issuing of ordinary or stock
options is known to as share capital. The quantity of share capital or equity funding that a
company has might affect people in different ways as more public sales are made. The phrase
"share capital" may indicate a multitude of subjects based on the circumstances. Accountants'
guidelines for establishing publicly traded company financial statements are significantly more
narrowly defined. The actual sum generated by the firm through the transfer of securities is
referred to as share capital (Mukhopadhyay, 2016).

Relationship with director- The relationship between the shareholder and director is very
critical for a firm as it can take it to the new heights but at the same time it can take it to the
down track if not analysed and evaluated in a precise manner. The shareholders and directors for
a bond and their relationship is very unique and one is dependent on others as stakeholders are
depending on the directors for accurate and appropriate financial statement of the company while
directors are dependent on them for good investment in the enterprise (Quinton and Wilson,
2016).
Identification of methods from which capital can be raised
There are mainly 3 methods of raising capital and they are very important for a firm to
analyse them in a very detailed manner so that it can lead to the balanced position of the
company in the long run. The 3 methods are described as follows-
Equity capital- Equity capital, often referred as "net worth" or "book value," is the
difference between a business’s holdings and debts (Silbiger, 2016). Many firms are solely
financed with their very own money. It might take the shape of funds deposited by the investors
or proprietors in a corporation with no obligations. With most companies, that's the preferred
method of financing. They wouldn't have to repay since they wouldn't have to. However, it can
be quite pricey. This can take a lot of effort to expand a business that has been financed this
manner.
Debt capital- This is revenue which is granted as a mortgage with both the expectation
that it will be repaid by a stated period. An institution, a borrower, or a large corporation is
frequently the financial proprietor. In return for your spending their funds companies agree to
take interest charges. Consider interest expenditure to be the cost of “rentals” funds to grow your
company. It's commonly referred to as the cost of capital. Around 80% of small firms in the
United States are believed to rely on borrowing to some extent (Soto-Acosta, Popa and Palacios-
Marqués, 2016).
Speciality capital- This is the benchmark, and as a company entrepreneur you should
strive to find it. There are a few financial assets that really are essentially free and can help to
expand the economy. The adverse payback period, also known as affect profitability, and
insurers floating are examples (Toro-Jarrín, Ponce-Jaramillo and Güemes-Castorena, 2016).

CONCLUSION
It can be concluded from the above that there are number of internal as well as external
factors that affects both the company as well as the persons that are interested in its overall
performance and thus all the aspects has to be evaluated and researched in a very precise format
so that it can lead to the achievement and the accomplishment of the desired goals and objectives
that are stated and formulated at the starting.

REFERENCES
Books and journals