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Vacaton of office as director under section 167

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Hello Experts,

Section 167 states the circumstances under which a director shall vacate his office. One among the situation is his failure to disclose his interest in any contract in which such director is interested. On account of such failure, whether he is liable to vacate his office of that company only or he should vacate the office of all companies in which he is a director. If he is a director in 5 companies in total, whether from 5 companies he should vacate? Kindly clarify

Thanks in advance.

Replies (3)

Quick Summary

This discussion clarifies the implications of Section 167 regarding director office vacation. It addresses whether a director failing to disclose an interest in a company contract must vacate their office from all directorships or just the one where the default occurred. The consensus suggests that a failure to disclose interest typically leads to vacating the office only in the specific company where the contravention happened, unlike disqualifications under Section 164(2) which can affect all directorships.

saurabh gupta

31 Points Posted on 10 May 2020

Yes except u/s 164(2) where he will have to vacate all the offices except the office which have failed to comply the requirements stated therein. in all other he will have to vacate all the offices

Chirag

Professional

1979 Points Posted on 11 May 2020

No, Non disclosure of interest in any contract or arrangement entered by the company, then his office as director become vacant only in the company in which he contravened 184.Its contrary 167(1) First proviso where on getting disqualification u/s164 then he will be deemed to vacate office from all companies except in defaulting one.

Harish choursiya

Student cs professional

249 Points Posted on 15 May 2020

That person who fails to disclose his interest directly or indirectly in the contract and arrangement entered into with the company, he shall have to vacate from the position of directorship only from the concerned in which such default had occurred not from the others company where he holds the position of director.

Another aspect for the vacation from the other company in which no default has occurred for the filing of financial, annual return or default to debt repayment..... As mention in section 164(2)clause a and b read with proviso to section 167(1)(a).

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