Director Disqualification from a Company in India
Director Disqualification and Condonation
Director Disqualification has grown quite a lot in recent times. From failed startups to ignoring to file the compliances, the reasons for the same given by the Ministry of Corporate Affairs are many. If you have prevented them, you can prevent yourself from getting disqualified.
Grounds for Disqualification
The following are the grounds for director disqualification from a Company in India as per the Companies Act of 2013:
- The Director has failed to file the Annual Returns and the Financial Statements for three years in a row.
- The Director has not repaid the deposits they have taken, paid any interest, or paid any debentures. When this happens for 1 whole year, the Director is also closed.
- The Director is an un-discharged insolvent.
- The Insolvency application filed by the Director is still pending.
- The Director is involved in an offense that they are convicted of. Also, the conviction has led to imprisonment for not less than six months.
- A Court/Tribunal has passed an order that disqualifies the Director.
- The Director holds shares of a company that has not made any payment of any such call in six months.
What happens in the absence of a Director(s)?
When a director is disqualified, it does not affect the Company due to the Company’s perpetual nature. In this case, a temporary new director is hired for the time being. The other personnel of the Company takes this course of action after filing all of the overdue returns. Once they have fulfilled their returns up to the recent date, they can only hire a new director.
How can a Company reinstate a Director?
However, what you need here is reinstatement as a director. You would need an assistant to go through this long and arduous process. Therefore, Registrationwala, through its experience and experts, is here to assist you so that you can regain your position as the Director of the Company.