Removal of Directors Disqualification

Removal of Directors Disqualification

Directors Disqualification can occur due to non compliance of the Companies Act 2013. Directors Disqualification can be removed after fulfilling and adherence to rectification of non-compliance.

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Addition of Directors, Removal / Resignation of Directors, Increase in Authorised Share Capital, Share Transfer and Transmission, Shareholders Agreement, Removal of Directors disqualification, Revival of struck off companies, Change Company name, amendment in MoA and AoA

Every Director needs to perform his/her duties and responsibilities professionally and diligently, In case wherein the director is found to contravene the provisions of Companies Act, then Registrar of Companies (RoC) is empowered to declare such directors as disqualified.

Directors Disqualification has severe effect; any Director who is declared disqualified cannot be served as director. Let’s understand it with the help of example, If any individual is serving as a Director in 15 companies then once it become disqualified due to any default in any one company, then such director ceases to become director in all 15 companies. Further, if in a company there are 2 directors and one of the director is disqualified then as per the Companies Act to maintain minimum 2 directors in a private limited company, such private limited company also becomes inactive due to non maintenance of minimum number of directors. Any Director who has been disqualified cannot become director in any company for the period of five years starting from the date of disqualification.

Conditions which attract Directors Disqualification:

  1. Any Director who fails to file Annual Financial Statement in the form of Annual Return to the Registrar of Companies consecutively for three financial years.
  2. Any Director who unable to repay deposits along with accrued interest thereon and such delay continues for more than one year.
  3. Any director who is declared as insolvent
  4. Any director who is declared as unsound mind
  5. Any director who has been sentenced for imprisonment for not less than six months by any competent court, shall be disqualified.
  6. Any director who has been sentenced for imprisonment for not less than seven years, shall be disqualified permanently.
  7. Any director who fails to pay call on the shares and such default continues for more than six months.

Procedure for removing Director Disqualification:

  • The first step towards removing of director disqualification id to file a writ petition before the high court.
  • Writ petition must comprises of memo of parties to petition, notice of motion, synopsis of list of date and events, stay application u/s 151 of CPC.
  • Application shall be made before NCLT u/s 252 of the Companies Act 2013 for those companies whose name got struck off in disqualification.
  • Application to RoC in CRF (Change Requirement Form) regarding activation of DIN.

With the ever changing Law and regulatory requirements, we keep on track and advise the same on timely manner in order to ensure proper compliance. We at ReturnFilings.Com will understand the purpose of your removal of directors disqualification and thereafter will provide you detailed analysis mentioning the law requirement and compliances need to fulfil in order to provide removal of director disqualification related services economically and efficiently. We at ReturnFilings.Com will provide you details of regulatory filings in order to ensure proper smooth and timely compliances. We at ReturnFilings.Com are determinate to provide end to end solution; our motto is you concentrate on your business while we at ReturnFilings.Com will take care of all your compliances need relating to removal of directors disqualification.