Section 164 of Indian Companies Act 2013 "Disqualifications for appointment of director"
(1) 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 undischarged 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:
Provided that 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 complied with sub-section (3) of section 152.
1[(i) he has not complied with the provisions of sub-section (1) of section 165.]
(2) 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:
2[Provided that where a person is appointed as a director of a company which is in default of clause (a) or clause (b), he shall not incur the disqualification for a period of six months from the date of his appointment.]
(3) A private company may by its articles provide for any disqualifications for appointment as a director in addition to those specified in sub-sections (1) and (2).
3[Provided that the disqualifications referred to in clauses (d), (e) and (g) of sub-section (1) shall continue to apply even if the appeal or petition has been filed against the order of conviction or disqualification.]
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1. Ins. by Act 22 of 2019, s. 26 (w.e.f. 2-11-2018).
2. The proviso ins. by Act 1 of 2018, s. 52 (w.e.f.
7-5-2018).
3. The proviso subs. by s. 52, ibid. (w.e.f. 7-5-2018).
(1) No person, after the commencement of this Act, shall hold office as a director, including any alternate directorship, in more than twenty companies at the same time:
Provided that the maximum number of public companies in which a person can be appointed as a director shall not exceed ten.
1[Explanation I ].-- For reckoning the limit of public companies in which a person can be appointed as director, directorship in private companies that are either holding or subsidiary company of a public company shall be included.
2[Explanation II.-- For reckoning the limit of
directorships of twenty companies, the directorship in a
dormant company shall not be included.]
(2) Subject to the provisions of sub-section (1), the
members of a company may, by special resolution, specify any
lesser number of companies in which a director of the
company may act as directors.
(3) Any person holding office as director in companies more than the limits as specified in sub-section (1), immediately before the commencement of this Act shall, within a period of one year from such commencement,--
(a) choose not more than the specified limit of those companies, as companies in which he wishes to continue to hold the office of director;
(b) resign his office as director in the other remaining companies; and
(c) intimate the choice made by him under clause (a), to each of the companies in which he was holding the office of director before such commencement and to the Registrar having jurisdiction in respect of each such company.
(4) Any resignation made in pursuance of clause (b) of sub-section (3) shall become effective immediately on the despatch thereof to the company concerned.
(5) No such person shall act as director in more than the specified number of companies,--
(a) after despatching the resignation of his office as director or non-executive director thereof, in pursuance of clause (b) of sub-section (3); or
(b) after the expiry of one year from the commencement of this Act, whichever is earlier.
3 [(6) If a person accepts an appointment as a director
in violation of this section, he shall be liable to a
penalty of two thousand rupees for each day after the first
during which such violation continues, subject to a maximum
of two lakh rupees.].
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1. The Explanation renumbered as Explanation I thereof by
s. 53, ibid. (w.e.f. 9-2-2018).
2. Ins. by s. 53, ibid. (w.e.f. 9-2-2018
3. Subs. by Act 29 of 2020, s. 33, for sub-section (6) (w.e.f.
21-12-2020)..