Qualification shares

Is it necessary for a director of a public company to hold qualification shares??

what if he does not hold any shares of the company???

Replies (3)

NO AS PER SEC 270 OF THE COMPANIES ACT 1956 IT IS NOT NECESSARY TO HOLD Q.S UNLESS THE ARTICLE PROVIDE......MORE OVER ARTICE CANT PROVIDE TO HOLD QS MORE THAN A NOMINAL VALUE OF 5OOO.....

AS per sec. 270 director is required to hold qualification shares only if required by articles. and following rules will apply thereof:-

1) if the director is not already holding qualification share he should obtain it within 2 months

2) Nominal value should not exceed 5000/- if nominal value of one share is more than 5000 then share qualification will be 1 share

if director does not hold share qualification required by articles then

1) he will have to vacate his office u/s. 283 if not obtained within 2 months of appointment

2)penalty of 500 per day after 2 months if he continues to act as director and penalty of 5000 will also aplly for not vacating the office

 

Is it same for both private as well as public limited companies???

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