Section 254 – The Companies Act,1956

The Companies Act, 1956

254. Subscribers of memorandum deemed to be directors.

In default of and subject to any regulations in the articles of a company, subscribers of the memorandum who are individuals, shall be deemed to be the directors of the company, until the directors are duly appointed in accordance with section 255.

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The idea behind section 254 is that as the office of a director is to some extent an office of trust, there should be somebody readily available who can be held responsible for the failure to carry out the trust and it might be difficult to fix that responsibility if the director was a corporation or an association of persons; Oriental Metal Pressing Works (P) Ltd. v. Bhaskar Kashinath Thakoor, 1961 (31) Comp. Cas. 143: AIR 1961 SC 573.

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The Companies Act, 1956

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