prpri Vacation of Director under Companies Act, 2013 Vacation of Director under Companies Act, 2013

Vacation of office

The office of director is vacate in following cases

-When director incurs any of disqualification u/s 164 but if he incurs disqualification u/s 164(2) the office of director shall become vacant in all companies ,other than the company which is in default under that sub section

-He absents himself from all meetings of the board held during a period of 12 months(date to date ) with or without seeking the leave of absence of BOD

-He contravenes the provisions the section 184 i.e. entering into contracts or arrangements directly or indirectly

-He fails to disclose his interest in any contractor arrangement in which he is directly or indirectly interested

-He becomes disqualified by an order of a court or the tribunal

-He is convicted by court of any offence ,whether moral tripeptide or otherwise and sentenced to imprisonment for not less than six months

However the office shall not be vacate by director in case of orders referred in clause (e) & (f)

1. For 30 days from the date of conviction or order of disqualification

2. If an appeal and petition preferred within 30 days as against the conviction resulting in sentence or order ,until expiry of seven days from the date on which such appeal or petition is disposed of

3. an appeal and petition preferred within 30 days as against the conviction resulting in sentence or order ,until expiry of seven days from the date on which such appeal or petition is disposed of

4. if any further appeal or petition is preferred against order or sentence within 7 days, until such further appeal or petition is disposed of

  • He is removed in pursuance of provisions of this act
  • He is being appointed as virtue of his holding any office or other employment in the holding ,associate ,subsidiary, ceases to hold such office or other employment in that company

Lets make some points more clear:

  • Period of director vacation will be counted from present FY or next FY.
  • Director will vacate the office with or with granting permission for leave of absence
  • If meeting is adjourned because of quorum then director is not liable for vacation
  • If half of meeting is attending then also he will not be director is not liable for vacation
  • Vacation is on particular date rather than a period.

Penalty

If director continues in the office even after he knows the fact that he has vacant then he shall be punishable with

Imprisonment: max 1 year

Fine minimum 1 lakh and maximum 5 year or with both

Appointment of director by CG

If all the director vacate their office under section the promoter or in his absence the CG shall appoint the required numbers of directors who shall hold office till the directors are appointed by the company in the general meeting

A private company may by its article provide any other ground for the vacation of office of a director.

Author Bio

Qualification: CS
Company: KHUSHBOO PATODI & ASSOCIATES
Location: INDORE, Madhya Pradesh, India
Member Since: 29 Apr 2021 | Total Posts: 6

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