29 January 2008
Sir, I thank all for earlier suggestion. I have a very important query and please advise me on this This query is relating to Director disqualification u/s 274(1)(g) under Companies Act. There are two public limited companies A and B and there are common directors in both companies. The company A has finlaised the accounts for 2006-07 on 01.09.2007. The annual returns for 2006-07 have also been prepared and we have not filed yet which we will be filing this week with additional fees also. Now this company A has also not filed for 2004-05, the date of AGM being 01-09-2005 and not filed for 2005-06, the date of AGM being 01-09-2006
Summary For company A ---------------------- F.Y. Date of AGM Annual Returns with ROC filed date ------ ------------- ----------- 2004-05 01-09-2005 28-01-2008 (filed belatedly with fine)
2005-06 01-09-2006 will be filed with in this week
2006-07 01-09-2007 will be filed with in this week
2007-08 01-09-2009 financial year not yet closed
Company B has filed annual returns till date.
As stated above, we filed the annual returns for 2004-05 on 28-01-2008 and we will be filing the other two immediately. My understanding of the section 274(1)(g) is that for any attestation on 2007-08 onwards, even if we file the annual returns now, this section will not be attracted immediately. But I do not the date from which, the applicability of Sectio 274(1)(g) in the above scenario is applicable and for what activities it is applicable? Which date is important here for the applicability of Section 274(1)(g)? 1.Please let me know whether this situation is going to attract Section 274 1(g) for company A? 2.The company A has also closed its operations and is only on the verge of selling its fixed assets also. 3.The company B being a active and regular public limited company(has regularly filed annual returns till date), whether the directors being common to both A and B are safe in terms of the above? 3.If yes, is there any compounding of offence under which the same can be regularised so as not to render the directors also disqualified for Company B also. This is because, the directorship of common directors in Company B is very very important and please let me know this positively and I am keeping my fingers crossed with anxiety. Please suggest me how the common directors can be saved from disqualifying from Company B directorship.
29 January 2008
The effect of section 274(1)(g) is, if a person is already a director of a company which has not filed the AR for three cosecutive years, he can not be appointed as director of any other public company for a period of five years starting from the date on which the company (in which he is presently a director)failed to file the AR.
As per the interpretation a director of A can not be appointed as director of any other public company, if his appointment has to be taken up.
The only way the disqualification is removed is through subsection (2). That is, after rectifying the defaults, the person concerned has to apply for removal of disqualification.
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