Can a director continue in the board after his arrest

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Please let me know if a director can continue in the board after his arrest and being in jail for 20 days.

Whats the provision as per Companies Act, 2013/

 

Replies (4)

If he has been arrested and imprisoned for 20 days he is eligible to become a directior as no disqualification u/s 164 attracts and reason why he has been arrested also is relevant for disqualification after appointment.

As per section 164 (1) of Companies Act 2013, a person shall not be eligible for appointment as a director of a company, if-

  • he is of unsound mind and stands so declared by a competent court;
  • he is an undischarged insolvent;
  • he has applied to be adjudicated as an insolvent and his application is pending;
  • he has been convicted by a court of any offence, whether involving moral turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence.
  • an order disqualifying him for appointment as a director has been passed by a court or Tribunal and the order is in force;
  • he has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call;
  • he has been convicted of the offence dealing with related party transactions under section 188 (Related Party Transaction) at any time during the last preceding five years; or
  • he has not complied with sub-section (3) of section 152.
  • As per Section 152(3) no person shall be appointed as a director of a company unless he has been allotted the DIN.

Pleease read the underline sentenses there is clear cut written. 

U/s 164 of Companies Act a director can be only be disqualified if he has been convicted by a court of any offence involving morale turpitude or otherwise and sentenced to imprisonment for not less than six months.

In your case the imprisonment period is less than 6 months, hence no disqualification shall attract.

According to section 164 of companies act 2013, a person shall be disqualified if he has been convicted by court of any offense weather involving moral turpitude or otherwise and sentencend for a imprisonment of six months and period of 5 years have not lapsed from date of exp[iry of sentence. if director has been convicted of any offence and sentenced to imprisonment for every offense, then he shall be disqualified as per section 164(1) and if suffer from disqualifiacation as per section 164, then he has to vaccate the office as per section 167

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