Directors as trustees Directors are trustees of the company’s money and property and they have to safeguard them and use them for the sake of the company and on behalf of the company. According to Law of trust, the equitable ownership of the trust property is vested with the beneficiary only, Hence directors cannot act as a full-fledged trustee. 12th Commerce Unit - - . .
PM Example : Eswar Company has two directors Deepa and Mani. The directors issue , shares to the public and receive Rs. each per share from the shareholders as share application, share allotment and share first call money. However they themselves do not pay Rs.
for each of the shares taken by them. This amounts to breach of trust and hence they are required to pay Rs. each for the shares held by them.