ALTERNATE DIRECTOR (SECTION 313)
- The Board of directors of a company may, if so authorised by its articles or by a reaction passed by the company in general meeting, appoint an alternate director to act for a director during his absence for a period of not less than three months from the State in which meetings of the Board are ordinarily held.
- The alternate director merely fills a temporary vacancy in the office of a director which already exists and no new office of director is created by his appointment. Many provisions of this Act do not apply to. the alternate director.
- For instance. appointment of an alternate director is not considered as an increase in the strength of the Board of directors. Likewise, alternate directorship held by a person cannot be counted towards maximum number of directorships which a person can hold. An alternate director is not required to hold any qualification shares. However, the alternate director is subject to the same liability and supposed to perform the same duties as any other director.
- It is the prerogative of the Board of Directors to appoint an alternate director. The article of the company or a resolution passed by the shareholders must give an enabling power to the Board to appoint an alternate director. Neither the shareholders of the company nor any other person can exercise the power to appoint alternate director. alternate director is not an agent of the original director.