Disqualifications
for Appointment of Director
(1) A person shall not be eligible for
appointment as a director of a company, if —
(a) he is of unsound mind and stands so declared by a competent court;
(b) he is an undischarged insolvent;
(c) he has applied to be adjudicated as an insolvent and his application is pending;
(d) he has been convicted by a court of any offence, whether involving moral turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence:
COMMENT: If a person has been
convicted of any offence and sentenced in respect thereof to imprisonment for a
period of seven years or more, he shall not be eligible to be appointed as a
director in any company;
(e) an order disqualifying him for
appointment as a director has been passed by a court or Tribunal and the order
is in force;
(f) he has not paid any calls in
respect of any shares of the company held by him, whether alone or jointly with
others, and six months have elapsed from the last day fixed for the payment of
the call;
(g) he has been convicted of the
offence dealing with related party transactions under section
188 at any time during the last preceding five years; or
(i) he has not
complied with the provisions of sub-section (1) of section 165.
(2)
No person who is or has been a director of a company which—
(a) has not filed financial
statements or annual returns for any continuous period of three financial
years; or
(b) has failed to repay the deposits
accepted by it or pay interest thereon or to redeem any debentures on the due
date or pay interest due thereon or pay any dividend declared and such failure
to pay or redeem continues for one year or more,
shall be eligible to be re-appointed
as a director of that company or appointed in other company for a period of
five years from the date on which the said company fails to
do so.
(1) Every director shall inform to the company concerned
about his disqualification under sub-section (2) of section
164, if any, in Form DIR-8 before he is appointed or
re-appointed.
(2) Whenever a company fails to file the financial
statements or annual returns, or fails to repay any deposit, interest,
dividend, or fails to redeem its debentures, as specified in sub-section (2)
of section
164, the company shall immediately file Form
DIR-9, to the Registrar furnishing therein the names and
addresses of all the directors of the company during the relevant financial
years.
(3) When a company fails to file the Form
DIR-9 within a period of thirty days of the failure that
would attract the disqualification under sub-section (2) of section
164, officers of the company specified in clause (60) of section
2 of the Act shall be the officers in default.
(4) Upon receipt of the Form
DIR-9 under sub-rule (2), the Registrar shall immediately
register the document and place it in the document file for public inspection.
Provided
that where a person is appointed as a director of a company which is in default
of clause (a) or clause (b), he shall not incur the disqualification for a
period of six months from the date of his appointment.
(3) A private company may by its
articles provide for any disqualifications for appointment as a director in
addition to those specified in sub-sections (1) and (2):
Provided
that the disqualifications referred to in clauses (d), (e) and (g) of sub-section
(1) shall continue to apply even if the appeal or petition has been filed
against the order of conviction or disqualification.
DISCLAIMER: THE
ARTICLE IS BASED ON THE RELEVANT PROVISIONS AND AS PER THE INFORMATION EXISTING
AT THE TIME OF THE PREPARATION. IN NO EVENT I SHALL BE LIABLE FOR ANY DIRECT
AND INDIRECT RESULT FROM THIS ARTICLE. THIS IS ONLY A KNOWLEDGE SHARING
INITIATIVE.
THE AUTHOR
– CS DEEPAK SETH (ASSOCIATE PARTNER HELPINGHANDS PROFESSIONALS LLP) AND
CAN BE REACHED AT CONTACTHHPRO@GMAIL.COM OR 9910248911.
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