Removal of Director Disqualification

Introduction - Director Disqualification?

A Director can be disqualified for various reasons including non filing of annual returns , misrepresentations, cheating/fraud or 'unfit' conduct. Failing to adhere your duties mentioned under the Companies Act,2013.

What is Director Disqualification?

Disqualification means the act of stopping from taking part in some activity because of unwanted behaviour or breaking the regulations or not following the order. Here director disqualification under the Companies Act 2013, means disqualification to act as a director in all meetings and activities.

What are the duties of the director?

The Company is a separate legal entity and it cant act on its own. So a Private Limited Company needs Board of Directors to take decisions and do activities. He is an agent for the company and has to act on behalf of the company.

When can directors be disqualified?

According to the Section 164 of the Companies Act,2013 a person is not eligible for appointment as a director , if

  1. 1) He is of unsound mind;
  2. 2) He is a Undischarged Insolvent;
  3. 3) He has applied to be adjudicated as an insolvent and his application is pending;
  4. 4) he has been convicted by Court for not lessthan 6 months;
  5. 5) By Any Court / Tirbunal Order;
  6. 6) not paid calls;
  7. 7) not filed financial statements or annual returns for any continuous period of three financial years;
  8. 8) has failed to repay the deposits;
  9. 9) Other reasons as may prescribed by the AOA.

What are the qualification of directors?

He is a representative of the company and enjoys highest position of the company. Hence he must have basic qualifications like age morethan 18 years, sound mind, not an undischarged insolvent or having pending application, not convicted. Other qualifications company may prescribe by way of AOA like Qualification Shares.

Can I be a director of a company after liquidation?

If it is a voluntary liquidation, you can be a director. Generally , Insolvency Professionals will be your company' Directors during liquidation.

Can a disqualified director be appointed as CEO?

You Cant. If a company cannot appoint Disqualified director as CEO.

Can a disqualified director be a shareholder in India?

Yes. You can. Unless he is disqualified for unfair transactions like misuse of related party transactions / expelled by the order of Court/Tribunal/SEBI, he cant be a share holder.

What is a disqualification order?

Disqualification means the act of stopping from taking part. This order issued by the ROC/Court/Tribunal is called Disqualification Order.

Can a disqualified director be a partner or Sole Proprietor?

Yes. As there is no special to control , the disqualified director can be a partner or sole Proprietor. But he cant take indirect participation in any company for the period of his disqulification.

Can a disqualified director be a director in another company?

No. You cant act as a director in any other company.

Can a disqualified director attend board meeting?

No. He cannot participate any board meeting for the period.

Can a disqualified director be a company secretary?

No. If he is ineligible to appoint as a company secretary, he cant be appointed as a company secretary.

Relief to disqualified directors / Remedies for disqualified directors under the Companies Act, 2013

The disqualified directors have some relief against disqualification. The disqualified director has to wait for the disqualification period of 5 years. If he/she needs remedy / relief, they have to approach Court/NCLT.

How to Remove Disqualification of Directors? or Procedure for removal of disqualification of director under companies act 2013

Removal of Director Disqualification is a time consuming job. We have to approach the Court/NCLT for removal. We can approach High Court and apply for Writ. The court will order for removal of disqualification of a director, if it accepts the director's view.

how to remove disqualification of directors u/s 164(2)

After Filing annual returns and financial statements, we can approach the Court to give directors to remove the disqualifications.

Board resolution for removal of disqualified director

There is no need for board resolution for removing disqualification . Sometimes, you may need board resolution for reappointment.

Draft writ petition for removal of disqualification of directors

Draft Copy Writ Petition for removal of disqualification of directors will send to you by our Smart CA Experts before filing. You have to confirm and sign the petition.

how to activate din of disqualified director

After receiving disqualification order from the court/tribunal, the disqualified directors can reach ROC to reactivate their DIN Number and change the DIN Status.

Disqualification of directors latest news

Now, ROC is online. So we can check the latest news of directors disqualification in mca.gov.in.

How do I check my MCA director status

There is a government portal to check the status of a director. It will give the DIN Status.

Disqualified Directors List

MCA / ROC is regularly publishing disqualified director list in their portal. mca.gov.in. Please visit and download directors list.

Conclusion

We have explained various questions in the above paragraphs. Removing disqualification of a director is a not a easy job. But we can handle and remove by way of court order unless he is disqualified due to court conviction. At Smart CA, we are here to support you. We have senior advocates who handles this in and out.