Section 5 of The Road Transport Corporations Act, 1950
Management of Corporation and Board of Directors.
1[5. Management of Corporation and Board of Directors.--(1) The general superintendence, direction and management of the affairs and business of a Corporation shall vest in a Board of Directors which, with the assistance of its committees and Managing Director, may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.
- (2)The Board shall consist of a Chairman and such other Directors, being not less than five and not more than seventeen, as the State Government may think fit to appoint.
- (3)The State Government may, if it so thinks fit appoint one of the other Directors as the Vice-Chairman of the Board.
- (4)Rules made under this Act shall provide for the representation, both of the Central Government and of the State Government concerned, on the Board in such proportion as may be agreed to by both the Government and of appointment by each Government of its own representatives thereto and where the capital of a Corporation is raised by the issue of shares to other parties under sub-section (3) of section 23, provision shall also be made for the representation of such shareholders on the Board and the manner in which the representatives shall be elected by such shareholders.
- (5)The term of office of and the manner of filling casual vacancies among the Directors shall be such as may be prescribed.]
Summary
- This provision places the management and direction of the corporation into the hands of a Board of Directors.
- it states that the Board will consist of a Chairman and between five and seventeen other Directors.
- It gives the State Government the power to appoint the Chairman and the Directors.
- it allows for the appointment of a Vice-Chairman if the State Government chooses.
- it requires that rules define how the Central and State governments are represented on the Board.
- It ensures that if the corporation raises money by selling shares to the public, those shareholders must also be represented on the Board.
Practical examples
FAQ
1. Who manages the business of the corporation under the Road Transport Corporations Act, 1950?
Section 5 of the Road Transport Corporations Act, 1950, states that the general superintendence and management vest in a Board of Directors.
2. What is the maximum number of directors allowed on a Board under the Road Transport Corporations Act, 1950?
According to Section 5 of the Road Transport Corporations Act, 1950, the Board can have no more than seventeen directors besides the Chairman.
3. Who appoints the Chairman of the Board under the Road Transport Corporations Act, 1950?
Under Section 5 of the Road Transport Corporations Act, 1950, the Chairman is appointed by the State Government.
4. Can the Central Government have representatives on the Board under the Road Transport Corporations Act, 1950?
Yes, Section 5 of the Road Transport Corporations Act, 1950, requires that rules provide for the representation of both the Central and State Governments on the Board.
Test yourself
1.Under Section 5 of the Road Transport Corporations Act, 1950, what is the minimum number of Directors allowed on the Board?
2.According to Section 5 of the Road Transport Corporations Act, 1950, who assists the Board in exercising its powers?
3.Under Section 5 of the Road Transport Corporations Act, 1950, what happens if a Corporation issues shares to other parties as mentioned in Section 23?
4.Who determines the term of office for Directors under Section 5 of the Road Transport Corporations Act, 1950?