Director Disqualified under section 164(2)(a)

This query is : Resolved

Raj Kumar (Querist)
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08 February 2022 There are two companies A and B. Company B failed to file its annual statements due to which one director of Company A became disqualification u/s 164(2)(a) in 2017 when MCA published list of disqualified directors. Now office of this director in Company A got automatically vacated in 2017 but he didn't resign though he stopped signing Financial Statements, MCA forms and stopped attending board meetings of Company A. Now in Oct21 his disqualification period of 5 years is completed.
My query is this director now wants to sign Financial Statements, MCA forms, attend board meetings of Company A on the ground that his disqualification period is completed though he didn't resign since 2017 and continue to appear as director on MCA portal since 2017. Can he do so without submitting his resignation OR he has to first resign now & Company A to file his resignation in current date OR get his resignation in back date & Company A to do late filing by paying late fees.
Thanks

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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06 July 2024 In the scenario you've described, the director's disqualification under Section 164(2)(a) of the Companies Act, 2013 was for a period of 5 years, which has now been completed in October 2021. Here's how the director can proceed:

1. **Current Status on MCA Portal**: Since the director's disqualification period has ended, theoretically, they are eligible to resume their role as a director without needing to resign. The director's details might still show as active on the MCA portal if no formal resignation was submitted.

2. **Resumption of Directorship**: The director can resume signing Financial Statements, MCA forms, and attending board meetings of Company A, given that their disqualification period has ended. There is no mandatory requirement to resign formally now unless they wish to clarify their status.

3. **Formal Resignation (Optional)**: If the director wants to update their status officially and avoid any potential complications regarding the gap in signing documents during the disqualification period, they can consider submitting a resignation letter to the board of directors of Company A. This resignation can be dated to reflect the current date or a date after the disqualification period ended.

4. **Late Filing of Resignation**: If the director opts to resign now, Company A should file the resignation with the Registrar of Companies (RoC) promptly. Late filing fees may apply depending on the duration since the resignation was effective. It's advisable to consult with a company secretary or legal advisor to ensure compliance with filing requirements.

5. **Board Meeting and Decision**: The board of directors of Company A should discuss and formally accept the director's resignation, if submitted, and ensure that all necessary filings are completed with the RoC.

In summary, the director can technically resume their role in Company A now that the disqualification period has ended. However, if they want to regularize their status and ensure compliance, submitting a resignation and completing the necessary filings would be prudent. Consulting with a legal professional or company secretary will ensure that all procedures are followed correctly.