Section 164 of companies act 2013

This query is : Resolved

gopal (Querist)
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29 April 2014 As on 1-4-2014, X Pvt Ltd has not filed returns continuous period of three financial years and now as per section 164 all the directors are deemed to vacated the office.
Now 1-4-2014 on wards who has to run the company as the company do not have any directors. Will this company become with one without Board???

Or this section will be practically effective from 30-09-2016, the directors who has not filed annual returns for 31-03-2014, 31-3-2015 and 31-03-2016 are not eligible to continue or for the reappointment as Directors.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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29 April 2014 new set of directors needs to be appointed for this i will advise u to take a legal help...

Nikhil Kaushik

Nikhil Kaushik (Expert)
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30 April 2014 it has a retrospective application. so yes, all the existing directors become disqualified for any fresh appointment or reappointment. The correct approach shall be to immediately file the past returns to save the board from any disqualification.

please note again that the disqualification is only for the purpose of fresh appointment or reappointment...violation of 164 wont reslt in immediate vacancy/removal from the position of directorship.

gopal

gopal (Querist)
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30 April 2014 Thank you Mr.Nikhil Kaushik,

But section 167 come into force immediately. Is this not so///

Vacation of office of director.
167. (1) The office of a director shall become vacant in case—
(a) he incurs any of the disqualifications specified in section 164;

Nikhil Kaushik

Nikhil Kaushik (Expert)
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30 April 2014 Gopal,

thanks for drawing my attention to 167. Yes you are correct, vacation shall be immediate.

Further, going through 167(3), I got the solution to your problem. It is clearly stated that once all the directors are disqualified, the promoter shall make fresh appointment for required number of directors and in his absence central govt shall do so. Such freshly appointed directors shall hold office till next AGM.

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