Distinguish between ‘managing director’ and ‘manager’. What are their disqualifications

As per Section 2(26) of the Companies Act, 1956, a ‘managing director’ means

a director wh, by virtue of an agreement with the company or of a resolution passed

by the company in general meeting or by its Board of Directors or by virtue of its Memorandum or Articles of Association, is entrusted with substantial

powers of management which would not otherwise be exercisable by him. The expression ‘managing director’ includes a director occupying the position

of a managing director, by whatever name called (say, President). The managing director is, however, to exercise his powers subject to the

superintendence, control and direction of the Board.

. The term ‘manager’ has been defined under Section 2(24) of the Companies Act, 1956 as 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, and whether under a contract of service or not.

On perusal of the aforesaid definitions of the managing director and manager alongwith other relevant Sections of the Companies Act, the following points

of distinction may be noted:

(1) A ‘managing director’ is entrusted with substantial powers of management. A ‘manager’, on the other hand, has the management of the whole or

substantially the whole of the affairs of a company.

(2) A company may have more than one managing directors but it cannot have more than one manager.

(3) A managing director is appointed either under an agreement or by a resolution of the Board or general meeting or under the provisions of Memorandum

or Articles. A manager, on the other hand, is usually appointed either under a contract of service or by the Board of Directors though the Articles may also

provide for his appointment.

(4) A managing director must be a director whereas a manager mayor may not be a director.

(5) A managing director, on his ceasing to be a director, shall automatically cease to

be the managing director as well. A manager-director, however, can continue as

a manager even though he ceases to be a director.

(6) The grounds of disqualification of a managing director as given in Section 267 remain effective for whole life and cannot be waived by the Central

Government. The grounds of disqualification of a manager as given in Section 385 are

only for five years and can also be waived by the Central Government.

Disqualifications of a Managing Director Please refer to ‘point 9’ under answer to