Directorship and Directors under the Companies and Allied Matters Act (CAMA)

A set of practice questions and answers regarding directorship, types of directors, statutory requirements, and disqualifications based on the Companies and Allied Matters Act (CAMA).

According to section 269 of the Companies and Allied Matters Act (CAMA), who are directors?

Directors are persons who are duly appointed by the company to direct and manage the affairs of the company.

What are the specific types of directors mentioned in the lecture?

Managing director, chairman, executive director, non-executive director, independent director, shadow director, alternate director, nominee director, and life director.

Under which section of the Companies and Allied Matters Act is the independent director provided for?

Section 275.

Under which section of the Companies and Allied Matters Act is the alternate director provided for?

Section 270.

According to Section 271 of the CAMA, what is the minimum number of directors required for a company?

A company must have a minimum of two directors, except for small companies.

How is the maximum number of directors for a company determined?

The maximum number is as stated in the articles of the company.

What is the requirement for independent directors in a public company?

A public company shall have at least $1/3$ of its directors as independent directors.

What is the liability for carrying on business with less than two directors?

Every director or member who is aware that the company carries on business with less than two directors after 60 days from when the number fell below two will be held liable for all liabilities incurred during that period.

Which sections of the CAMA cover the disqualification of a director?

Sections 279, 280, 281, and 283.

Which individuals or entities are disqualified from being company directors?

An infant, a lunatic or persons of unsound mind, a corporate body (other than its representatives so appointed), undischarged bankrupt persons, and fraudulent promoters banned for ten years.

How is a 'promoter' defined in the context of company formation?

A promoter is someone who takes steps towards the formation of a company but does not do so in a professional capacity.

According to the Business Facilitations Act, on what basis must a promoter be banned to be disqualified as a director?

The ban must be on the basis of fraud, misconduct, or unethical conduct.