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director disqualified u/s 274 (1) (g) be appointment as a sm

abhijeet (student) (59 Points)

14 April 2010

Can a director disqualified u/s 274 (1) (g) be appointment as a small shareholder's director??
It is said u/s 252 (relating to appointment of small sh.'s director) that -"disqualifications of a small sh. director are the same as that of any other director - EXCEPT THAT sec. 274(1)(g) shall not apply to him.
Inversely there is no explanation u/s 274(1)(g) to above.
So tell me whether a director disqualified u/s 274 (1) (g) be appointment as a small shareholder's director??
thanks

aBHIjEEt

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8 Replies

CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 15 April 2010

Yes, a director disqualified u/s 274 (1) (g) can be appointed as a small shareholder's director.

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 15 April 2010

Dear Abhijeet,

I dont think so....

Because company law specifically prohibits any persons who has been disqualified under section 274(1)(g) to be appointed as a director in any PUBLIC COMPANY.

And small shareholders' director under section 252 shall be treated as director for all other purposes except for appointment as whole time director or managing director.

Contrary views are welcome....

CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 15 April 2010

Dear Ankur Ji,

Please refer the Proviso to Sec 252(1) read with Companies (Appointment of Small Shareholders Directors) Rules, 2001 :-

the rule says :-

Rule 5. Disqualification:-
A person shall not be capable of being appointed as small shareholders’ director of a company, if –
(i) he has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;
(ii) he is an undischarged insolvent;
(iii) he has applied to be adjudicated as an insolvent and his application is pending;
(iv) he has been convicted by a Court of any offence involving moral turpitude 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;
(v) he has not paid any call in respect of 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; or
(vi) an order disqualifying him for appointment as director has been passed by a Court in pursuance of section 203 and is in force, unless the leave of the Court has been obtained for his appointment in pursuance of that section.

Condition of disqualification as mentioned in Section 274(1)(g) is not covered in above 6 points.

So, the director disqualified u/s274(1)(g) is not disqualified to be Small Shareholders' Director..

abhijeet (student) (59 Points)
Replied 15 April 2010

m still confused .........

disqualification of 274(1)g are not applicable to a small shareholder director so

What if Mr A is SSH director in defaulting public ltd co????can he b appointed as a director in any another co???????

abhijeet (student) (59 Points)
Replied 16 April 2010

neone plzzz do slove maah querry!!!!!!!!!!!!!!!!

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CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 16 April 2010

Abhijeet, I think ur query has already been solved.

Jagruti (CS) (Service) (1953 Points)
Replied 16 April 2010

Kindly refer the Commentery of Section 252 in Ramaiya which states that disqualification u/s 274(1)(g) will not be applicable for appointment of Small shareholder directors

CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 16 April 2010

Originally posted by : Jagruti (CS)
	Kindly refer the Commentery of Section 252 in Ramaiya which states that disqualification u/s 274(1)(g) will not be applicable for appointment of Small shareholder directors