Differentiate between Managing Director and Director.

Question 32 of 43

Q. Differentiate between Managing Director and Director.

Gujarat GsebGujarat Board (GSEB) HSC Commerce Board 2025Subjective· 4mImportance★★★★★

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A managing director has substantial delegated powers and manages day-to-day affairs; an ordinary director is just a board member with no individual executive power.

Basis	Managing Director	Director
Meaning	A director entrusted with substantial powers of management of the company's affairs.	A person appointed to the Board to direct/supervise the company collectively.
Powers	Has wide individual executive powers to manage day-to-day business, subject to the Board's control.	Has no individual power; acts only as part of the Board through resolutions.
Appointment	Appointed by an agreement/Articles/Board or general-meeting resolution as MD, and the appointment is subject to statutory conditions and approvals.	Appointed by the shareholders (or Board for casual vacancy/additional directors) in the ordinary way.
Responsibility	Greater responsibility for the actual running and results of the company.	Responsibility limited to participating in and overseeing board decisions.
Remuneration	Usually paid a substantial managerial remuneration/salary (within legal limits).	Usually paid only sitting fees and/or a small commission.
Number	A company generally has one (or few) managing directors.	A company has several directors forming the Board.

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Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2026Set MARCH1 markMCQ
$Q. How many independent directors can a company have?$
(a) (A) 1/4
(b) (B) 2/3
(c) (C) 3/4
(d) (D) 1/3
›Reveal solutionSolution

At least one-third (1/3) of the board of a listed company must be independent directors — the correct option is (D).

To ensure objective and independent oversight, the law requires every listed public company to have at least one-third of its total number of directors as independent directors. (The Central Government may prescribe a minimum number for certain other public companies as well.)

…

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CBSE 2025Set MARCH1 markMCQ
$Q. In how many companies can a person become director?$
(a) (A) 10
(b) (B) 20
(c) (C) 30
(d) (D) 40
›Reveal solutionSolution

A person can be a director in a maximum of 20 companies — option (B).

Section 165 of the Companies Act, 2013 fixes the maximum number of directorships a single person may hold at any one time at 20 companies. Within this limit, the number of public companies must not exceed 10. This ceiling prevents over-commitment and ensures di …

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CBSE 2025Set MARCH1 mark
$Q. How many minimum Directors required in single person company?$
›Reveal solutionSolution

A One Person Company needs a minimum of 1 director.

Under the Companies Act, 2013 the minimum number of directors is: One Person Company – 1, Private company – 2, and Public company – 3. Since a One Person Company has only a single member, the law allows it to function with just one director (who is often the sole member himself). Hence the min …

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CBSE 2022Set MARCH1 markMCQ
$Q. What is the minimum number required as directors in a public company?$
(a) 2
(b) 4
(c) 3
(d) 5
›Reveal solutionSolution

A public company must have a minimum of 3 directors.

Under the Companies Act, 2013 the minimum number of directors is fixed by the type of company: three for a public company, two for a private company and one for a One Person Company. A public company therefore cannot function with fewer than three directors on its board. (The maximum, for any comp …

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CBSE 2022Set MARCH1 mark
$Q. In how many maximum companies a person can function as a Managing Director?$
›Reveal solutionSolution

A person may act as Managing Director in a maximum of 2 companies.

To ensure a Managing Director can devote proper attention to a company, the Companies Act restricts the number of companies in which one person may hold that office. As a rule a person is appointed Managing Director of one company, but he may be appointed as Managing Director (or manager) of not more than one more company — i.e., a maximum of two companies in all — and …

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Q.Differentiate between Managing Director and Director.

Concept understanding — Number and Types of Directors

Q.Differentiate between Managing Director and Director.

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