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Executive director and whole time director

Amit Kumar Verma (CA Final CS Professional) (501 Points)

25 April 2013

Hi Members..

Can anyone tell me what is the difference between Executive Director and Whole Time Director?

Thanks..

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5 Replies

Sneha (Company Secretary) (1594 Points)
Replied 25 April 2013

As per the explanation under section 269 of the Companies Act, a whole-time director includes a director in the whole-time employment of the company. In other words, a director who devotes his whole time to the affairs of a company is called a whole-time director of the company. A whole-time director of a company cannot accept the position of a whole-time director in other companies, though he may accept office of non-whole-time director in other companies subject to the limits imposed by section 275 read with sections 277 and 278.

Unfortunately the Companies Act has not defined an Executive Director in the Act, hence An executive director is the senior manager of an organization, company, or corporation. An executive director is remunerated for his work. Further Whole time Director is also Executive Director but not Vice versa.

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Amit Kumar Verma (CA Final CS Professional) (501 Points)
Replied 25 April 2013

Thankyou..

CS MOHIT SALUJA (PRACTICING CS Jalandhar 9914558709) (5155 Points)
Replied 08 May 2013

But Sneha m\y point of view is quite different from yours in respect of "An executive director is the senior manager of an organization, company, or corporation. An executive director is remunerated for his work."

As in private limited companies, an individual is use to be director of a no. of companies and he us to get the salary from each and every company. then it doesnot mean that he is working there. but he director in such private limited company for the sake of only to be director and is getting salary just for the sake the slary is to be given. Hence, we can not say that executive director is remunerated for his work rather we can say as he is in company as director, thats why the company is paying him

Sneha (Company Secretary) (1594 Points)
Replied 09 May 2013

Mohitji, Kindly appreciate the fact that Non Executive Directors are appointed as director for the sake of only to be director and is getting sitting fees for the sake of attending the Board Meeting.

However, an executive director can also be called as employee of the Company who gets remuneration for his active participation in the affairs of the Company..

Anurag Mishra (Company Secretary) (22 Points)
Replied 09 December 2016

Please consider the fact that in Rule 2(k) of Companies (specification of definition details) Rules, 2014

"Executive Director" means a Whole-time director as defined in clause (94).

Thus, does this not signifies that if a person is executive director in one company, then he can't take any other position as director except non-executive director??

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