01 January 2014
Companies Act provides for DISQUALIFICATION OF A DIRECTOR (not the qualification): . . DISQUALIFICATION OF DIRECTORS (SECTION 164):
This section bracketed disqualification in three different classes; primary disqualifications, disqualification due to corporate in actions, and additional disqualifications.
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Primary disqualifications (Sub – section 2 of section 164):
A 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;
(b) he is an un-discharged insolvent;
(c) he has applied to be adjudicated as an insolvent and his application is pending;
(d) he has been convicted by a court of any offence, whether involving moral turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence. If a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be appointed as a director in any company;
(e) an order disqualifying him for appointment as a director has been passed by a court or Tribunal and the order is in force;
(f) he has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call;
(g) he has been convicted of the offence dealing with related party transactions under section 188 at any time during the last preceding five years; or
(h) he has not been allotted a director identification number.
The disqualifications referred to in clauses (d), (e) and (g) of sub-section (1) shall not take effect—
(i) for thirty days from the date of conviction or order of disqualification;
(ii) where an appeal or petition is preferred within thirty days as aforesaid against the conviction resulting in sentence or order, until expiry of seven days from the date on which such appeal or petition is disposed off; or
(iii) where any further appeal or petition is preferred against order or sentence within seven days, until such further appeal or petition is disposed off.
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Disqualification due to corporate inaction (Sub – section 2 of section 164):
No person who is or has been a director of a company which—
(a) has not filed financial statements or annual returns for any continuous period of three financial years; or
(b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more,
shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so.
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A private company has power to provide any additional disqualification. . .
02 January 2014
Yes, because act says about "disqualification" of Directors. . No academic qualifications are required. Even non-MBA can become a Managing Director. . . (Now one can imagine what is the utility of collecting more degrees). . . So you can also become a director..... directly. :)
CAclubindia
