Directors disqualified under section 164(2) of the Companies Act, 2013 to abstain from holding office and filing any document/application with MCA during the period of disqualification

Directors disqualified under section 164(2) of the Companies Act, 2013 to abstain from holding office and filing any document/application with MCA during the period of disqualification

September 11, 2017 Corporate 0

The Ministry of Corporate Affairs (“MCA”) in it’s website under ‘Important Notices’ segment has stated that a disqualified Director under Section 164(2) of the Companies Act, 2013 (“Act”) should not hold office as a director during the period of disqualification and must refrain, during the said period, from filing any document or application with MCA as the same will be summarily rejected.

It has been further clarified that the such disqualification shall not affect the liability of the, director for violation of Section 164(2) read with Section 167 of the Act including the action under Section 448 read with  Section 447 of the Act.

Please note that as per Section 164(2) of the Act, a person who is or has been a director of a company which —

  1. has not filed financial statements or annual returns for any continuous period of three financial years; or
  2. 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,

is not eligible to be re-appointed as a director of that company or appointed in other company for a period of 5 years from the date on which the said company fails to do so.

Source: Ministry of Corporate Affairs

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