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 provision which obligates the director in case of nonfiling 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 is relating 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 a period of 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’s i.e., 2015-16, 2016-17 & 2017-18 attracts the heavy penalty.
A consequence of Non-filing of Financial Statements or Annual Return:
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 a period of 5 years.
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