Can a Director of one company be an employee of another Company?

Can a Director of one company be an employee of another Company?

Who is a Director?

A Director is an individual elected by the company to exercise the statutory affairs of the company and he is the one who is responsible for the management of the company’s affairs. The scope of authority of the director is limited by the provisions of the companies act 2013 and clauses in articles of association of the company.


Types of Directors?

Let’s understand the different types of directors that businesses usually have.

  • Residential Director
  • Independent Director
  • Additional Director
  • Small shareholders Director
  • Alternate Director
  • Nominee Director
  • Shadow Director

In general, there are two categories of directors: "executive" and "non-executive."

An executive director may be the only director of a company and has a significant personal interest in the company's success, often as a major source of income throughout their working life.

On another side, a non-executive director is a consultant who is not involved in day-to-day operations or management but rather provides guidance and input in the company's strategic planning and policy-making processes.

Roles and Functions of a Director

The company's director holds responsibility for overseeing and directing the company's affairs, as well as ensuring that company policies are executed and implemented effectively. Their focus is on efficient management, acting in good faith to meet the company's objectives and benefit its members as a whole.

There are a number of roles that a director of a company can perform such as:

  • The director acts as an agent on behalf of the company which is an artificial person to executes the decisions of the company.
  • The director acts as an employee of the company if he is appointed to whole-time employment.
  • The director acts as an officer of the company and is liable for penal provisions if any applicable to the company.
  • The director acts as a trustee of the company, the company’s money, and property as well.

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