Question

Directors of which type of company have to subscribe for qualification shares

Answer 1

The Articles of Association of a Company may require the Directors of that Company to hold some minimum shares at the time of his Appointment within such time limit as prescribed under Section 270 of the CompaniesAct, 1956; this holding of minimum shares is known as 'Share Qualification of Directors'.

Answer 2

A 'Public Company' is required to subscribe for qualification shares.

Explanation:

• A 'public company' needs to possess qualification shares(part of the common stock) in order to hold the position of the director of that company.
• As per the 'Companies Act,' the directors or board of directors of a public company are required to possess a minimum amount of shares while being appointed to qualify for the post.
• It helps people in endowing interest and faith in the company to invest in the stock or share of the company.

Learn more: Qualification shares

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