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Sir please kindly thoroughly explain the difference between the de-facto and shadow directors.How can we differentiate between these two types of directors? What are those distinctive/unique/decisive factors that we need to watch out for in exam when we are looking to differentiate between these two types of directors?
A de facto director is ‘anybody occupying the position of director by whatever name called’ whereas a shadow director is ‘a person in accordance with whose instructions the directors are accustomed to act’
So a de facto director is a person within the company, maybe with the title of, say, procurement secretary, but that person’s actions are in the nature of those taken by properly appointed and titled ‘director’
A shadow director is not necessarily a person from within the company, say a brother of a substantial shareholder, but the properly appointed directors follow the instructions of that person
OK?
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