Saswatabanerjee
Partner - Risk Management
Excelencia
Interview Skills Guide
Loginmiraclelogistics
Asso.prof.(commerce & Management) Pg
Hopegovind
Manager- Hr & Admin
+3 Others

I am creating a new proprietorship firm and getting ID cards developed for my employees, can I also have an ID card for my self with title "Director" or it is not allowed by the law? Please advise?
28th February 2016 From India, Delhi
Dear ,

All your post shows that you are starting a new firm with you being proprietor.

Congrats on that.

However you seem to be too much cautious and excited at same time. Its better if you could take help from legal or some experienced accounts person to clarify your thoughts.

One thing I would suggest is to think yourself as an employee of the company in its initial phases at least. Of course every employee of your company will know you are the owner, but title like Director and CEO will only show your supremacy and it will affect your personal goals. Present yourself as Senior Manager or General Manager which will pose you as an employee and your fellow workers will feel more comfortable and attached. Its something that comes naturally to any employee working in any organisation of any size. Director or CEO are always one who do not attach themselves to (presumed)

All the best for your future.

Difficulty, discouragement, and disappointment are not signs of failure; they represent the challenges on your path of success.
29th February 2016 From India, Delhi
Yes, there is no law which says a director cannot have I card. I have issued it to my directors also in the past. Director is as good as an employee.
29th February 2016 From India, Mumbai
Yes, Director is also an employee of the company & should possess ID card. It helps you to prove identity when you approach other organizations specially banks.
29th February 2016 From India, Vijayawada
You are creating a proprietary firm.

There is no legal concept of a director in a proprietary firm.

Therefore, you should actually have designation as proprietor.

There is a law that disallows a company from designating any person as director unless the person is on the board of the company. If you are not a company, the rule does not apply. I can't find any law similar for proprietor firm. Many organisations have the post of director to designate the head of a certain function (similar to president)

But on the other hand, what is the exact purpose of the identity card ?

Is it for identification to outsiders (Like courier boys, telephone service team) or for internal (watchman will check before allowing to enter) or access control (Smart card, RFID, biometric asset). If it is internal, you do not need it. The watchman knows you. If it is external, may be visiting cards are better. You need to evaluate the purpose and how it fits into your environment.

If you are issuing one to your self just to appear part of the team (everyone in office will display it) you can issue with any designation of your choice, or even without a designation for your self.... There is no legal binding so long as it is not a misrepresentation
1st March 2016 From India, Mumbai
ID either digital or magnetic or non magnetic can be had by all including the Prop like employees. There is no bar. In fact it helps in many ways when the Prop. visits various offices/clients etc. to carry an ID card. This will also avoid the embarrassment of saying 'I have none' when asked to produce ID. By all means the Prop. can have one for himself, only thing he/she cannot have the luxury of Employee No. I'm sure many of my clients have it.
2nd March 2016 From India, Bangalore
#Anonymous
@Saswatabanerjee,
Could you kindly highlight which is the law which disallows the designation of Director being conferred upon non board members. In advertising the position of Account Director and Client Services Director are a level below General Manager and every advertising agency has this designation since many decades. Similarly all HR Directors are not board members. Similarly, there are many non board members who are designated as Technical Director, Commercial Director, Finance Director, Executive Director etc. But, since you have mentioned that the law disallows it, can you kindly let us know which law disallows it. That will be an enlightenment or us.
2nd March 2016 From Indonesia, Jakarta
The term director is legally applicable for companies which fall under Companies Act.
A Director is a person who controls a company - may be private or public limited company . They have statutory obligations placed upon them which are different from that of a proprietor . And also , remember, a company MUST have at least 2 Directors.
No law may stop you from using any terminology but one must understand that people may get misguided if owner calls himself director.There is always a difference between owner/proprietor and director.
2nd March 2016 From India, Pune
Dear Anonymous

The companies act 1956 and the new companies act 2013 both have the definition of companies act.

The acts also very categorically state that someone who is not a member of the board of directors can not be designated as a director. It is an offence under the act and the company can be penalised for it. The penalty is pretty high.

First, also remember this is only for companies. Partnership firms can call anyone as director.

Second, many companies deliberately or unknowingly violate the rule. The ROC has not persecuted anyone for it unless they have signed official ROC related documents. But they have the power to do so.

An art director or movie director, etc in an advertising company is different. It is known by common usage that this person is not a director under companies act, but that his work is direction. Client services director if not on the board is a violation of the act, as is any executive director, finance director, etc who is not actually a director.

I don't know the exact place where this rule is now stated. I will check and come back on it. The new companies act is highly convoluted and I have not read all parts.
3rd March 2016 From India, Mumbai
#Anonymous
@Saswatabanerjee
Thanks for your explanation. I have worked in one of the top advertising agency as a HR Director. I am also currently designated H R Director of a large MNC petrochemical company and am not a Board member. I was not a board member even before wherever I was designated HR Director. I also understand that as per the Company's act. it's not a crime to use the title of Director. When I checked with my Company Secretary, he confirms that it is not against the law to use the title., since a Director is a person who directs the activities of the function/business of which he is responsible, irrespective of whether he is a board member or not. When I referred to him your view, he stated that many tend to think that the term Director implies a board member and it is not so. In case you are able to let me know the sections which disallows the use of tge term, I will show it to him, since I believe we must not use a title which is disallowed by law.
3rd March 2016 From Indonesia, Jakarta
Dear anonymous
I asked some of the corporate lawyers I know and they confirmed it is not allowed. Director is a specific term in company law and can not be used in common terms of direction. If that was the case, you can also be called managing director if you manage directions. That's what we used to call chop logic.
That can of course be used for a position of an actual director - art director, etc which is a common parliance term for the function.
Unfortunately none of us got time to go through the companies act to find the relevant section of the act. I hope to check it out next week. Message me separately and we will discuss it offline.
This is the reason why companies used to use the term "President" instead of directors for top posts.
President need not be a member of the board.
4th March 2016 From India, Mumbai
#Anonymous
@Saswatabanerjee Incidentally the HR heads in Chemplast and also in DeutscheBank in India are designated MD (HR) and they are not board members. Would like to get the sections under which it is banned. Though my company secretary says there is no such law and if it was there, many would have been prosecuted by now. I will also check it out. Just managed to get the Companies act with commentary.
4th March 2016 From Indonesia, Jakarta
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