274 (1) (g)

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Querist : Anonymous

Querist : Anonymous (Querist)

18 April 2012 is director reappointed in defaulting co. before 5 year lapse?

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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19 April 2012 yes, since the section says Director of the defaulting public company cannot be appointed as a director of ANY OTHER PUBLIC COMPANY(not the defaulting company) for a period of 5 years.

Ajay Mishra

Ajay Mishra (Expert)
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19 April 2012 Hi

All the existing directors of a public company in default other than the directors who have been exempted from application of section 274(1)(g) by the Central Government, will be disqualified for appointment or re-appointment as director in any other public company from the date on which the default committed by the said company is deemed to crystallize into a disqualification of the directors prescribed under this section.

Director of the defaulting public company cannot be appointed as a director of any other public company for a period of 5 years from the date on which the disqualification sets in, in case the disqualification is with reference to non filing of annual accounts and annual return and four years from the commencement of disqualification in the case of default in repayment of deposits, interest on deposits, debentures and dividend as the disqualification commences one year from the date of occurrence of the default.
Example 1: If the company fail to file annual accounts and annual return for financial years 2006-07, 2007-08 and 2008-09, he will be disqualified from being appointed as director in any other company for 5 years from the date the disqualification sets in, i.e. from the commencement of the financial year 2009-10 onwards.
Example 2: If a company fails to repay deposits for the financial year 2008-09, he will be disqualified from being appointed as director after one year from the date of disqualification sets in. i.e. from 2009-10 for four years there after.

He can continue as a director in other companies till the date on which he is due to retire. He can not be re-appointed in the vacancy caused on his retirement in the defaulting company.

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