Multiple choice

Which of the following is true with regard to the liability of a director of the company, in case of dishonour of a cheque that was issued by the company?

  1. All the directors are liable

  2. Nominated directors also liable

  3. Directors responsible for conduct of the business of the company, including managing director

  4. Only those directors who are responsible for accounts maintenance of the company

  5. All of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Section 141 of the NI Act makes the directors, manager, secretary and other officers of the companies liable if the offence is committed because of negligence on their part. The director must be, at the time of commission of offence, in-charge and responsible for the conduct of the business of the company. Section 141 does not make all the directors liable for the offence. 

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