Director Disqualification Period

• Only in the concerned company, thus no he will not be disqualified in other companies
• He will stand disqualified till the time company pays the calls but do note that as under section 167 he will also have to vacate his office.

Have a look at the following which has been taken from Section 164,

“Sec 164-Disqualifications of directors

 A person shall not be eligible for appointment as a director of a company, if —

 (e) -

(f) 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; (g) he has been convicted of the offence dealing with related party transactions under section 188 at any time during the last preceding five years; or (

(2) No person who is or has been a director of a company which—

(a) -

(b) -

shall not 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 on which the said company fails to do so.”

After going through the above provisions you would be able to understand that section 164(1) and 164(2) are independent and the provisions of

Hello Karanbatra,

Thanks for replying to my query.

I need more clarification regarding this Disqualification.

Section 164(1)(f) does not particular states in that company only in which he subscribe any shares.

If you refer form DIR 2 Consent to act as a director it includes this statement

" I, (Mr./Ms. Director Name) hereby give my consent to act as Director of (Company Name),
pursuant to sub­section (5) of section 152 of the Companies Act, 2013 and certify that I am not
disqualified to become a Director under the Companies Act, 2013".

Hello Sudhir,

If the director fails to pay any calls in respect of any shares of the company held by him and six months have lapsed from due date, then he needs to vacant the office of directorship from all Companies (Section 167(1)).

If he is not vacating the office of directoship after disqualifiying as per Section 164(1), it will attract penal provisions precribed in Section 167(2).

 

Hello Nisha,

Thank you for clarifying.

So he needs to vacate office of directorship from ALL companies.

Yes he needs to vacate from all companies.

Hi Nisha

Can you substantiate your answer, There is no such mention in the act or the rules  or what I have seen practically on section 164(1) and what you are saying applies in case of section 164(2).

Section 164(1) deals with disqualification of director....If he has not paid any call on shares and six months have elapsed from due date then he is disqualified from all companies....because section 164 (1) doesn't deal with particular copmpany

 

Hello Karanbatra,

Section 164(1) only describes the criteria for disqualification for appointing as a Director in any company.

If the disqualification criteria is attracted while functioning as director, then we are required to read Section 167(1) & (2) Vacation of Director. 

Let me reproduce the section for your reference :

Section 167

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

(2) If a person, functions as a director even when he knows that the office of director held by him has become vacant on account of any of the disqualifications specified in subsection (1), he shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.

I agree with Pankaj Madaan & Nisha Nish*t.

He Disqualified from all Company in which he/she acting as a director of a company.

Thank you all of you for replying..

In addition to that 164(3) private companies may add additional conditions to qualify Directors including 164(1). So if any person Disqualified to become director shall vacate his office from all Companies for certain period or for life time as prescribed in the act.

Hello Karanbatra,

Section 167(1) says vacation of office by Director

It clearly says about section 164 which means it includes of all sub sections of 164 i.e 164(1) 164(2) 164(3). if a director Disqualified in any one or all sections of 164 then he should vacate office immediately from company.

I hope you got clarification regarding this section.