Disqualification of Director
Director being the agent, employee, trustee and officer of the company holds a significant position in the company and are responsible for the smooth conduct of the working in the company. Companies Act, 2013 provides some disqualification for director. Section 164 of Companies Act, 2013 governs the disqualifications for appointment of a director.
Let’s understand what lawmaker is trying to convey:-
3 stages for reporting of Disqualification under section 164 (2)
Rule 14 of (Appointment and Qualifications of Directors) Rules, 2014
Stage 1– Responsibility of the Director to report his disqualification in Form DIR-8 to the company.
Stage 2– Company shall file Form DIR-9 to ROC within 30 days of the default.
Stage 3– Application for removal of disqualification to ROC in Form DIR-10.
Key Points
- If a person is appointed as director of a company who is in default under section 164(2) then he will not incur disqualification for 6 months from date of his appointment.
- Private Company may add any manner of disqualification other than mention in Section 164.
- Section 164(2) shall not apply to a Government Company.
FAQ’s
Q1. Director imprisoned for less than 6 months.
Ans. Can resume the office after taking bail.
Q2. Director imprisoned for more than 6 months.
Ans Can resume after 5 years from completion of imprisonment.
Q3. Director imprisoned for 7 years or above.
Ans Disqualified from appointed as director for lifetime.
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