Question

State the following statement is True of False:

The directors of a public company must purchase qualification shares.

• A. True
• B. False

Answer 1

The correct option is A True

This statements is True because of the following reasons:

(i) Section 2(13) of the Companies Act, 1956 says " Director includes any person occupying the position of a director by whatever name called."

(ii) The Companies Act, 1956 has not laid down any academic, professional or technical qualification for directors.

(iii) The provision regarding qualification shares does not apply to those Directors who:

(a) are appointed by the Central Government.

(b) represent the internet of special class of investors like debenture holders.

(c) are appointed as independent private company.

(iv) This provision is only applicable to Directors of a company.

(v) Hence, the Directors of a public company must purchase qualification shares.