Can one director make decisions without informing others?

In a private limited company, important decisions generally cannot be taken by a single director acting alone. Most significant matters must be decided collectively by the board through properly convened board meetings, and unilateral actions by one director can be challenged as invalid under company law.

Key points

• The board of directors functions as a collective body. One director acting without informing or consulting fellow directors typically lacks the authority to bind the company on significant matters.
• Certain decisions — such as taking loans, selling assets, or entering major contracts — require a formal board resolution passed at a duly convened meeting with proper notice to all directors.
• Every director must be given notice of a board meeting. A decision taken without proper notice to all directors can be challenged as procedurally invalid.
• As a shareholder, you have rights to information and can requisition an Extraordinary General Meeting (EGM) if the company's interests are being harmed.
• If a director breaches their duties of good faith and acts against the company's interests, they can be held personally liable for losses caused to the company.

Relevant law

The Companies Act, 2013 is the primary law governing this situation. Key provisions include Section 166 (duties of directors), Section 173 (notice requirements and conduct of board meetings), Section 179 (powers of the board), and Section 100 (requisition of an EGM by shareholders). The Secretarial Standards SS-1, issued by the Institute of Company Secretaries of India, also regulate board meeting procedures.

What you can do

• Review the company's Articles of Association and any shareholders' agreement to understand the defined powers and limits of individual directors.
• Write formally to the board requesting details of the decisions taken, citing your rights as a shareholder under the Companies Act, 2013.
• File a complaint with the Registrar of Companies (RoC), Ahmedabad if you believe the director has violated statutory provisions — complaints can be submitted through the MCA21 portal (mca.gov.in).
• Consult a company law advocate in Ahmedabad to assess whether the director's actions constitute oppression or mismanagement under Sections 241-242 of the Companies Act, 2013, and whether a petition before the National Company Law Tribunal (NCLT) is appropriate.