As we are aware that, Ministry of Corporate Affairs has disqualified lakhs of Directors on 01st November 2016 due to non-compliance of Section 164(2) by such directors.
As per the Companies Act, 2013 once a director is disqualified u/s 164(2), they shall be eligible to be re-appointed as a director of that company or appointed in another company for a period of five years from the date of disqualification.
A. EXTRACT OF SECTION 164(2)
(2) No 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.
B. EFFECT OF DISQUALIFICATION
Due to this disqualifications director were debarred from appointment as director in any other Company for the period of 5 years.
C. DE-FLAGGING OF DIN FROM DISQUALIFICATION
As the 5 years has been completed on 31st October 2021, therefore DIN of such directors are eligible for removal of Disqualification.
As there are no way out prescribed in Companies Act, 2013 for removal of 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.
Soon the status of DIN of such persons shall be changed from Disqualification to Active.
Tags corporate law