20 October 2010
During the audit it was found that the director of the private limited company are disqualified as they have not paid interest for more than 1 year and even not filled annual return for more than 3 years but still they are holding the post of director. My question is that is their any penalty in case of private limited company? If yes than plz tell the amount. Can they be reappointed as the director of the company? What is the obligation of auditors in this case
The disqualification stated in clause (g) is confined to directors of Public company only. The word used in section 274(1)(g) is appointment. Wherever the Legislature has intended that the word appointment should include re-appointment. A proviso to Rule 3(b) provides that both the disqualifications would apply to appointment and re-appointment of a director. • EXEMPTION Even though powers have not been delegated to the Government to accord the exemptions, Government companies are exempt from the applicability of section 274(1)(g). The Private Companies are also exempt from the applicability of the Disqualification of Directors Rules, 2003. Nominee directors appointed on the Board of assisted concern or other public companies by (a) public financial institution within the meaning of section 4A of the Companies Act, 1956; (b) Central or State Government; and (c) banking companies are also exempt from the provisions of section 274(1)(g) of the Companies Act, 1956.
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