Suyog S Kabra
Section 164 of companies act 2013, deal with Disqualification of Director. Sub-section 1 of section 164 list disqualification of Directors for appointment as a Director of a company. Appointment shall include reappointment but not continuation to be in office. Subsection 2 of section 164 adds two disqualifications which are applicable to reappointment of Directors in same company and appointment in any other company for a period of 5 years from the Date on which said company defaulted & disqualification arises. Disqualification under this two sub section is applicable in all companies irrespective of their category & status i.e. it applies to both public & private company however private company may specify additional Disqualification in its AOA.
According to rules 14 of the rules, every Director shall inform to the company concerned about his disqualification, if any, in form DIR 8 before he is appointed or reappointed. Where company fails to file to file their financial statements or annual returns or fails to repay deposit or Interest or Dividend or fails to redeem its debentures as specified in subsection (2) of section 164 company shall immediately file DIR 9 within a period of 30days of the failure that would attract disqualification. Upon receipt of the Form DIR 9 registrar shall immediately register the document & place it in the document file for public inspection. Any application for removal of Disqualification of director shall be made in Form DIR -10.
DISQUALIFICATION OF DIRECTORS (FEW CONDITIONS)
1. No person who has not filed financial statements or annual returns for any continuous period of Three financial years or
2. Has failed to repay deposits accepted by it or pay interest thereon or redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continuous for one year or more
POINTS TO REMEMBER
1. Shall the period of three consecutive years be calculated in respect of financial years commencing on or after this date i.e. 1st April, 2014 or prior to this date shall also incurs Disqualification.
No period has been provided under this section hence even past period of default will be considered for the purpose of section 164(2).However such disqualification will arise only at the time of reappointment & not before that.
2. Director of company which has not filed their financial statements & annual returns shall continue to hold office in other companies in which he holds office as a Director & he shall not appointed as Director in any new company for a period of 5 years.