\nSituation I:<\/strong>\nWhen the status of the concerned Company is \u2018struck off\u2019 and the Director wants to revive the Company and remove all his disqualification.<\/strong>\n
\nAn appeal for the revival of the concerned Company has to be filed before the NCLT (National Company Law Tribunal). Once the NCLT passes the order for the revival, the appellant is required to comply with the prerequisites to revive the said Company.\nIf in case the revival of the said Company is denied by the NCLT, then the Company can file an appeal before the Appellate Tribunal (NCLAT) for the revival.\n<\/td>\nSituation II:<\/strong>\nWhen the status of the concerned Company is \u2018struck off\u2019 and the Director does not want to revive the Company, but instead wants to remove all his disqualification.<\/strong>\nWrit petition for the removal of disqualification is required to be filed before the respective High Court or the Supreme Court. Once the interim or final order against such disqualification is received, the concerned Petitioner shall comply with the prerequisites to remove his disqualification.\n<\/td>\nSituation III:<\/strong>\nWhen the status of the concerned Company is \u2018active,\u2019 but all the said Directors are disqualified and want to remove the disqualification.<\/strong>\n
\nIn certain situations, where the said Company is active, but either one or all the directors are disqualified due to any reason, then such person shall go for situation II.\nIn certain other situations, when there is a deadlock or standstill in the Company, it is always advisable to appoint new Directors in the Company status of which is active.\n<\/td><\/tr><\/tbody><\/table>\n\n\n\n<\/span>Reappointment of the Disqualified Directors<\/strong><\/span><\/h2>\n\n\n\nIt is significant to note that there is no such prescribed provision to reappoint a disqualified director. Further, a disqualified director can only be reappointed if a time frame of five years has passed, starting from the date of disqualification. However, in the case where the said director duly abides by with all the prescribed provisions or rectifies his or her mistake, then the said person can be appointed as a director again.<\/p>\n\n\n\n <\/span>Difference between the provisions related to the Disqualification of Directors as per the Companies Act, 2013 and the Companies Act, 2013<\/strong><\/span><\/h2>\n\n\n\n\nCompanies Act, 1956<\/strong>\nSection 274<\/strong>\n<\/td>\nCompanies Act, 2013<\/strong>\nSection 164<\/strong>\n<\/td><\/tr>| \n(d) he has been convicted by the court of law for any offense involving moral turpitude and has also been sentenced imprisonment for not less than 6 months, and a period of 5 years has not elapsed starting from the date of expiry of the sentence; \n<\/td> | \nAlong with (d) it has also been Provided that if a person convicted of any offense and has also been sentenced imprisonment for a period of 7 years or more, he shall not be entitled to be appointed as a director in any company;\n<\/td><\/tr> | | \n(e) he has not paid any call regarding the shares held by him of the concerned company, whether alone or jointly with others, and 6 months have been passed from the last day fixed for making the payment of the call;\n<\/td> | \nCovered in (1) f\n<\/td><\/tr> | | \n(g) such person is already a director of a public limited company which: – (A) has defaulted in filing the annual accounts and annual returns for any continuous 3 financial years starting on and after the first day of April 1999; \nor (B) the concerned company has failed \n\nto repay its deposit or interest thereon on the due date or\nto redeem its debentures on due dates or \npay dividend \n\nand if such failure continues for 1 year or more; \nProvided that such a person shall not be entitled to be appointed as a director of any other public limited company for a tenure of five years starting from the date on which such a public limited company, in which he is a director, has failed to –\n\nfile its annual accounts and annual returns under sub-clause (a) or \nto repay its deposit or interest or \nredeem its debentures on the due date or \npay dividend referred to in clause (B)\n\n<\/td> | \nCovered under (2) with a minor change as – (2) No person who is or has been appointed as a director of a company which-\n(a) has not filed the financial statements or annual returns for any continuous period of 3 financial years; or \n(b) has failed to \n\nrepay the deposits accepted by it or \npay the interest thereon or \nto redeem any debentures on the due date or \npay interest due thereon or \npay any dividend declared \n\nand such a failure to pay or redeem continues for 1 year or more, shall be qualified to be re-appointed as a director of that said company or appointed in any other company for a period of 5 years starting from the date on which the concerned company fails to do so.\n<\/td><\/tr> | | \nNot covered\n<\/td> | \n1 (e) an order disqualifying him from the appointment as a director has been passed by the Court of law and the said order is in force;\n<\/td><\/tr> | | \nNot covered\n<\/td> | \n1 (g) he has been convicted of the offense dealing with the related party transactions under section 188 at any time throughout the last preceding 5 years; or\n<\/td><\/tr> | | \nNot covered\n<\/td> | \n1(h), he has not complied with the provisions mentioned under sub-section (3) of section 152.\n<\/td><\/tr> | | \n(2) The Central Government may, by issuing a notification in the Office Gazette, remove- (a) the disqualification caused by any person by virtue of clause (d) of sub-section (1), either generally or in relation to any other company or companies specified in the said notification; or \n(b) The disqualification caused by any position by virtue of the provisions mentioned under clause (e) of sub-section (1)\n<\/td> | \nNot specified\n<\/td><\/tr> | | \n(3) A private limited company which is not a subsidiary of any public limited company may, by its articles. \nProvided that a person shall be considered disqualified for appointment as a director on any other grounds in addition to those mentioned in the provisions of sub-section (1)\n<\/td> | \nHas widened the scope by enriching all sub-section and clauses of section 164 of the Companies Act, 2013 \u2013 \n(3) A private limited company may by its articles provide for any disqualifications regarding the appointment as a director in addition to those mentioned in subsections (1) and (2): \nProvided that the disqualification mentioned in the clauses (d), (e) and (g) of sub-section (1) shall not take effect- \n\nfor 30 days starting from the date of conviction or order of disqualification of the director; \nwhere an appeal or petition is being filed within a period of 30 days as aforementioned against the conviction resulting in a sentence or an order until expiry of 7 days starting from the date on which such appeal or petition is being disposed of; or \nwhere any further appeal or petition is being against the said order or sentence within a period of 7 days until such a further appeal or petition is being disposed of\n\n<\/td><\/tr><\/tbody><\/table>\n\n\n\n<\/span>Conclusion<\/strong><\/span><\/h2>\n\n\n\nAs we all know, a company has no physical existence of its own, and it is simply a legal entity that can only work through natural persons. Further, the person acting on behalf of the company is called a Director. They are the professional people, appointed by the company in order to direct its affairs. But as per section 164 (1) of the Companies Act, 2013, there are certain situations in which a person stands disqualified from being appointed a director. However, as per the provisions of section 252 (3) of the Companies Act, 2013, it is compulsory for a company to file an application in order to revive itself in respect of the disqualification of directors. The said application can be made by the creditor, member, etc. Moreover, it is significant to note that a disqualified director is eligible to be reappointed until and unless he or she rectifies or removes his or her disqualification.<\/div><\/p>\n","protected":false},"excerpt":{"rendered":" Section 164 of the Companies Act, 2013 talks about Director Disqualifications, i.e., the conditions and reasons by which a person could be disqualified from holding the position of a director in a company. Further, the heading of Section 164, \u201cDisqualifications for Appointment of Director,\u201d clearly states the grounds or the reasons on which a director […]<\/p>\n","protected":false},"author":12,"featured_media":1633,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26],"tags":[],"class_list":["post-1626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-din"],"acf":[],"yoast_head":"\n Director Disqualifications: A concept study - LawyerINC<\/title>\n<meta name=\"description\" content=\"Director Disqualifications, the conditions and reasons by which a person could be disqualified from holding the position of a director in a company.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lawyerinc.net\/learning\/director-disqualifications-a-concept-study\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Director Disqualifications: A concept study - 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