Disqualification of Director under Companies Act

Disqualification of Director under Companies Act

The Companies Act has brought various reforms time and again and the Companies Act, 2013 has come up with a provision which obligates the director in case of non-filing to Registrar of Companies.

With the update of the Ministry of Corporate Affairs dated 31st October 2019  which is regarding  Tagging of Directors as Disqualified in case the company has not filed the financial statements for the period relating to 2015-16,   2016-17 &  2017-18.

The provision that has given effect to this clause relates to  Section 164(2) (a) which states that “ No person  who  is or has been  a director of the company,  which – has not  filed financial statements  or annual returns  for any continuous  period of  three financial years, shall be eligible  to  be reappointed  as a director of that company or any other company for 5 years  from the date of which  the said company fails to  do so.”

What to Do Next?

Comply with provisions relating to filing of financial statements (Section 134) or Annual Return (Section 92) at earliest.

For information referring to The Act,  filing the statements and return for the previous year i.e.,  2015-16,   2016-17 &  2017-18 attracts a heavy penalty.

A consequence of Non-filing of Financial Statements or Annual Returns:

Tagging of DIN as Disqualified Director –

That means the DIN cannot be used or suspended for any filing of forms on the MCA 21 portal for 5 years.


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