Director Directors are the persons duly appointed by the Company to lead and manage its affairs and their legal position. At times they have to act as agents, managing partner, trustees, Employee, and Officer. Directors as Agents: A company as an artificial person, acts through directors who are elected representatives of the shareholders and who execute decision made for the benefit of shareholders. Hence directors share a relationship of an agent and a principal with the company.
Example : XYZ is Chennai based private limited Company which has two directors, Agi and Logu. The company wants to start its business operation in state of Karnataka and for that they need an office accommodation. Agi goes to Karnataka and buys a property in Bangalore to house the office. Although the purchase has been made by Agi the property belongs to the company.
Agi has just acted as an agent of the company. Directors are appointed to lead the company in relation to third parties. They can enjoy the rights and privileges of an agent. There is no personal liability on any contracts entered by them, if it is within the powers stated in the memorandum and articles of the company.
If it is not so they have personal liability. It is also considered that directors are not a full fledged agents of the company because they are elected person but agents are appointed persons.