As we are aware that, Ministry of Corporate Affairs has disqualified lakhs of Directors on 01st November 2016 due to non-compliance of Section 164(2) by such directors.
As per Companies Act, 2013 once a director disqualified u/s 164(2) shall not 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 of disqualification.
A. EXTRACT OF SECTION 164(2):
(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.
B. EFFECT OF DISQUALIFICATION:
Due to this disqualifications director were debarred from appointment as director in any other Company for the period of 5 years.
C. DE-FLAGGING OF DIN FROM DISQUALIFICATION:
As the 5 years has been completed on 31st October 2021, therefore DIN of such directors are eligible for removal of Disqualification.
As there are no way out prescribed in Companies Act, 2013 for removal of disqualification of Directors.
Ministry of Corporate Affairs has issued a ‘Public Notice’ on 10 November 2021 mentioned that all the concerned DIN disqualified on 01st November 2016 are eligible for defragging. MCA is in process of de-Flagg such DIN from Disqualification.
Soon the status of DIN of such persons shall be changed from Disqualification to Active.
*****
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).
Disclaimer: The entire contents of this document have been prepared based on relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, I assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not professional advice and is subject to change without notice. I assume no responsibility for the consequences of the use of such information.
Author Bio
On 2nd para there is an error of “not” word.
director disqualified u/s 164(2) shall “not” be eligible to be re-appointed as a director
or ineligible