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Section 164 outlines the disqualifications for being appointed as a director of a company. It states that a person cannot be a director if they are of unsound mind, an undischarged insolvent, have been convicted of certain criminal offenses within the past 5-7 years, have been disqualified by a court order, have unpaid share calls outstanding for over 6 months, have been convicted of offenses related to related party transactions in the past 5 years, or have not complied with obtaining a director identification number. It also says that no person can be reappointed as director of a company, or appointed to another company, for 5 years if their former company failed to file financial statements or pay deposits, debentures,

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Sohail Ahmed Khilji
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44 views12 pages

3

Section 164 outlines the disqualifications for being appointed as a director of a company. It states that a person cannot be a director if they are of unsound mind, an undischarged insolvent, have been convicted of certain criminal offenses within the past 5-7 years, have been disqualified by a court order, have unpaid share calls outstanding for over 6 months, have been convicted of offenses related to related party transactions in the past 5 years, or have not complied with obtaining a director identification number. It also says that no person can be reappointed as director of a company, or appointed to another company, for 5 years if their former company failed to file financial statements or pay deposits, debentures,

Uploaded by

Sohail Ahmed Khilji
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Section 164 – Disqualification of Director

Section 164(1) Person shall not be eligible for appointment


as a director of a company, if –
(a) He is of unsound mind and stands so declared by a
competent court
Section 164 – Disqualification of Director

(b) He is an undischarged insolvent


Section 164 – Disqualification of Director

(c) He has applied to be adjudicated as an insolvent and his


application is pending
Section 164 – Disqualification of Director
(d) He has been convicted by court of any offence, whether
involving moral turpitude or otherwise, & to imprisonment
for not less than six months & 5 years has not elapsed
from date of expiry of sentence
Section 164 – Disqualification of Director
If person has been convicted of any offence & sentenced to
imprisonment for 7 years or more, he shall not be eligible
to be appointed as director in any company
Lifetime Disqualification
Section 164 – Disqualification of Director
(e) An order disqualifying him for appointment as director
has been passed by a court or Tribunal & order is in force
Section 164 – Disqualification of Director
(f) He has not paid any calls in respect of any shares of
company held by him, whether alone or jointly with
others, & 6 months have elapsed from last day fixed for
payment of call
Section 164 – Disqualification of Director
(g) He has been convicted of offence dealing with related
party transactions under section 188 at any time during
last preceding 5 years
Section 164 – Disqualification of Director
(h) He has not complied with section 152(3) - DIN
Section 164 – Disqualification of Director
Section 164(2) - No person who is or has been director of
company shall be eligible to be re-appointed as director of
that company or appointed in other company for 5 years
from date on which company fails to do so -
(a) Has not filed financial statements or annual returns for
any continuous period of 3 F.Y.
Financial Statements
Section 2(40)

“Financial statement” in relation to a company, includes -

i) a balance sheet as at the end of the financial year

ii) a profit and loss account, or in the case of a company carrying on any activity not for
profit, an income and expenditure account for the financial year

iii) cash flow statement for the financial year (Not applicable to OPC, Small Co, Dormant
Co.)

iv) a statement of changes in equity, if applicable

v) any explanatory note annexed to, or forming part of, any document referred to in sub-
clause (i) to sub-clause (iv)
Section 164 – Disqualification of Director
(b) Has failed
Section 164(2)to- repay -
No person who is or has been a director of
a company which -
deposits redeem any pay any dividend
Or Or
accepted debentures on declared
by it or pay due date or
interest pay interest
thereon due thereon

such failure to pay or redeem continues for one year or


more

In case of Government Companies , section 164(2) shall


not apply

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