Report on Directors' Roles, Shareholders' Rights, and Raising Capital

This report provides a comprehensive overview of professional practices, focusing on the roles and powers of directors, the rights and obligations of shareholders, and various methods of raising capital for a business. It details the key responsibilities of directors, including their duties to act within their powers, promote the company's success, avoid conflicts of interest, and exercise independent judgment. The report also outlines the rights of shareholders, such as accessing financial records and voting, along with their obligations, including communication and balancing their interests with the long-term interests of the firm. Furthermore, it discusses different methods of raising capital, including public and private share issues, debentures, and long-term loans. The report concludes by emphasizing the importance of understanding these elements for effective business management and governance.

Professionals in
Practice

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Directors roles and powers ..........................................................................................................1
Shareholders.................................................................................................................................3
Methods of raising capital ...........................................................................................................4
CONCLUSION ...............................................................................................................................5
REFERENCES ...............................................................................................................................6

INTRODUCTION
The term professional practice defines that various work are should be conducted for a
specific profession or particular field and met all the requirements, standards, performance and
competence of business (Anela and Prasetyo, 2020). It is very important for accomplishing
better results and higher staff to be satisfied and to gain their credits in broad range of
professional learning and development. To understand this project, it should be determined
directors roles and powers, shareholders and consider other methods to raising capital.
MAIN BODY
Directors roles and powers
Director consist that an individual which is liable for other directors and it will liable for
policy and procedure in business enterprise. Key roles and powers of director are as follows:
Agent: Directors acts as an agent where they can promotes or object of firm to earn good
profit and revenue to gain their intrinsic value of share and earning of business enterprise.
Employee: Directors are appointed and approved by shareholders which acts as a
managing by day to day affairs of firm enterprise and all directors are operate by firm issued by
board of directors of firm.
Officer: Director is treated as main officer of firm who is responsible for some
consequences and affairs for firm which is not compliance by any act and other applicable legal
status are defined for several sectors.
Power of directors
 Power of director to make call for shares in respect for unpaid money.
 There is a lack of shares and lack of debentures whether it is inside and outside the firm.
 To borrow money otherwise than debentures and make loans to provide guaranteed for
any thing but bank does not require any resolution by board of directors.
Appointment of directors:
 There is articles of firm may be in list named of firm directors and it is association or
connected with firm subscribers of memorandum of association of directors (Cheng,
Rasiah and Cheong, 2021).
 Director are appointed by initial members of organization general meeting and may be
appointed during the time of board and absence of director not less than 3 months.
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 Nominee director refer to those person which are nominated by financial establishment or
body o9f government which holds up to shares in business organization. It must be
appointed by firm enterprise.
 It may be central government appointed by such certain circumstances in business and
transferable by single vote systems or cumulative vote systems.
Qualifications:
 Director must be an natural person who have a firm entity cannot act as director of
another firm (Deliu, 2019)
 Director must have an legal capacity and at the age of majority which is physically fit and
sound qualification to render statutory duties.
 There is no academic qualification which is need to held by person who is accountable
and obtain to directorship for firm.
Disqualifications:
 Person will not be eligibility for directorship in business enterprise if they ha been
declared by unsound mind by competent court.
 Person is insolvent who has discharge by facilities and has a pending application are
become insolvent.
 When director are unable to pay their debts and it cannot be covered by assets and
liabilities and proceeding against directors.
 It has not paid by call in respect of shares of firm and jointly with others and elapsed with
fixed call within last day.
Duties:
To act within powers: director must be in a accordance with taking decision making
power in business organization which is govern by document that should be outlines and rules
and regulations for running their firm (Johnson, Karpoff and Wittry, 2019)
To promote success of company: Director must have regard some consequences of
decision in stakeholders which should be include suppliers, communities and customers as well
as impact on business environment and long term success growth of firm.
To avoid conflicts of interests: To manage all situations where they have to maintain
their conflicts or sometime they have to avoid their conflicts in business concern that could be
reasonably carry out such functions in relation to specific firm.
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Duty to exercise independent judgement: Director must be exercise with various
judgement should not act like individual or group. This duty perform by director which is not to
be prevent when director is appointed by delegating their powers when firm articles are
associated to permit this.
Relationship with auditor:
The internal auditor focus on more about public organizations functions and it should be
qualified with various accounting professional (Kouaib, Mhiri and Jarboui, 2020). Auditors
responsibilities for statements of financial which has done by auditors that are audited to
financial statements cannot be interpreted. It should be claimed that director work are need to
confirm that it is imperative to understand shareholder is not always running their business
organizations. An auditor is liable towards for shareholders of firm and director it is appointed by
general meeting of shareholders. Auditor is receive information to maintain their legislation of
audit and communications of auditors by technical auditing regulations. External auditor are
qualified and registered by usually perform general activities of business and specifically
engaged to perform financial report. The main primary role is to accordance with auditing
standards on the basis of opinions whether they should be perform firm financial, position or not.
It should be identify frameworks and internal control of firm and identify misstatements that
would be results within outside the organization.
Shareholders
Shareholders is a person or institution that owns at least one share in a firm and it is also
famed as stockholders. It is an individual that owns of shares of corporation (Villalonga, 2019)
Rights and obligation:
Rights to access financial records: Shareholders have a right to access all transaction
related to firm and know how firm well doing to provided audited financial statements.
Right to vote: The right to vote represents and enables shareholders to participate in
decision making power and appoint directors to make such proposals and structural changes are
required.
Right to transfer ownership: Shareholders have a right to trade ownership or interest or
shares and it is important to rapidly exchange shares into money.
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Obligation of shareholders:
Communication: Shareholders communicate with other board of directors must keep
lines of communication and have a right to speak but duty to listen and obligation to make
informed policy and recommendation to board of directors on certain topic (Anela and Prasetyo,
2020) .
Interest: Shareholders interest in policies derive different looks from distance and have a
basic right to fairness and balance to interest of firm with short term interest (Wu, Sorensen and
Sun, 2019).
Share capital
Capital of a firm increasing many shares and managers or investors are directed towards
accomplishing their firm capital that used to improve to increase their operation of business of
the business venture. Shareholders display their equity shares which shows how much managers
of firm have invested in their business either they have to invest money or it by retained
earnings.
Relationship with directors:
Shareholders and directors have completely different roles in business concern and it
shows that owns by firm or shares and direct to manage it. Director does not need to be a
shareholders and shareholders has no right to become a director in business organization. The
main relationship of shareholders and director is firm which is made by directors board of
meetings and others to be made by shareholders resolution passed by general meetings.
Methods of raising capital
Public issue of shares: Firm can raise their capital through issue shares to public for a
fixed amount of shares either both equity and preference. Issue of shares to public is required
many formalities to be completed by approving shares by SEBI appointed by the underwriters
and registrars to the issue and filling with many prospectus. (Cheng, Rasiah and Cheong, 2021).
Private placement of shares: It is a method to raising finance in business from financial
institutions and those who are ready to invest in business concern.
Issue of debentures: Some firms can collect long term funds in business organisation by
issuing debentures whether it is convertible or non convertible which is very popular in India or
domestic marketplace.
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Long term loans: Firm can also maintain their long term loans from banks and many
institutions from financial like ICICI, or any other banks which is related to investors for shares
of firm. This will create confidence in investing money into business they lend to money for
shares, debentures and so on (Deliu, 2019).
CONCLUSION
From the above information, it has been concluded that professionals in practice
represents that they can conduct a work for a specific profession and met all these standards rules
and regulations, competence and performance of business. In this report, various topics are
covered such as roles and powers of directors include, duties, appointment, qualification, rights
and obligation of shareholders, share capital and relationship with directors and methods to raise
capital.
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REFERENCES
Books and Journals
Anela, F. L. and Prasetyo, A. B., 2020. The effect of ownership structure on investment
efficiency (Case study in non financial firms listed on Indonesia Stock Exchange in
2015-2017). ACCRUALS (Accounting Research Journal of Sutaatmadja). 4(01). pp.66-
76.
Cheng, Z., Rasiah, R. and Cheong, K. C., 2021. Theoretical Considerations. In Governing
Enterprises in China (pp. 15-41). Springer, Singapore.
Deliu, D., 2019. Corporate Governance Issues and Vulnerabilities in the Wake of a Global
Financial Crisis. In 6th SWS International Scientific Conferences on social sciences
2019 (pp. 297-306).Belot, F., Ginglinger, E. and Starks, L.T., 2019. Encouraging long-
term shareholders: The effects of loyalty shares with double voting rights. Université
Paris-Dauphine Research Paper, (3475429).
Johnson, W. C., Karpoff, J. M. and Wittry, M. D., 2019. The consequences to directors of
deploying poison pills. Fisher College of Business Working Paper, (2019-03), p.023.
Kouaib, A., Mhiri, S. and Jarboui, A., 2020. Board of directors’ effectiveness and sustainable
performance: The triple bottom line. The Journal of High Technology Management
Research. 31(2). p.100390.
Villalonga, B., 2019. On ownership structure and corporate performance: Looking back and
looking forward. Journal of Corporate Finance. 58. pp.64-67.
Wu, K., Sorensen, S. and Sun, L., 2019. Board independence and information asymmetry: family
firms vs non-family firms. Asian review of accounting.
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