MCA issues notices for Disqualification of Company Director

Last Updated On: Nov. 11, 2021, 10:20 p.m.
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MCA ISSUES NOTICE FOR DISQUALIFICATION OF COMPANY DIRECTORS

Few years ago,Ministry of Corporate Affairs had disqualified lakhs of Directors due to non-compliance of section 164(2) by such directors.

 

As per the Companies Act, 2013 once a director is disqualified under the section 164(2) shall 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.

 

What is Section 164(2)?

A 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.

 

 

What is the impact on Disqualification?

Due to this director were prohibted from appointment as director in any other Company for the period of 5 years.

 

As there were no way till now in Companies Act 2013 for removal 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.

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