What is Director Disqualification And Removal Of Disqualification? There are many grounds on which a director can be disqualified. They are as follows
- Failing to file financial statements or annual returns,
- committing an offense under the Companies Act, or
- breaching certain other conditions.
In India, these are dealt with by the Insolvency Service and the Secretary of State.
What Is Director Disqualification?
A director’s disqualification means that they are not able to carry out the duties of a director within a company for a set period of time. This can affect their reputation, earnings power, and future career prospects, as well as any claims against them by creditors.
The effects of a director’s disqualification can be long-lasting and can blight a person’s business life. In some cases, they may have to disclose their past disqualifications. Of course, this can prevent them from being involved in certain types of regulated businesses. Mover, it can even limit the opportunities for them to secure employment at an executive level.
What Are the Effects of Disqualification of a Director in Pvt Ltd Companies?
In India, a company director’s disqualification can result in a few things. It will prohibit carrying out certain duties and obligations within a company for up to 15 years. This can seriously damage their reputation, earning power, and career prospects. It can also impact their ability to secure employment at a senior level.
It can also impose a lengthy ban on their ability to work for any company. Meanwhile, it can mean that they are ineligible to apply for a role as a director at all. They are also prevented from forming new companies, and from appointing others to manage a company under their leadership.
Fortunately, there are some things you can do to help avoid a disqualification order or Removal Of Disqualification. For example, you can engage with the Insolvency Service as soon as you realize a company is in trouble. This will allow them to start an investigation before a decision is made. In fact, they can determine whether or not there is any chance of getting your company back on its feet.
How Can a Director Be Removed from the Board?
Another important thing to do is to appoint a lawyer who can advise you of your rights and options for Removal Of Disqualification. These lawyers will be able to guide you through the process of reviving your company and your directorship after disqualification has been imposed on you.
The legalities of reviving your company and directorship after disqualification are complex. Of course, with the right guidance, you can get your business on its feet again as quickly as possible. Our expert team will take care of every aspect of this. Without a doubt, they will ensure you are ready to work as a director again.
Application for Removal Of Disqualification
The governing law for removing disqualified directors from a board of directors is Section 252 (3) of the Companies Act, 2013. It states that a company must make an application to revive itself after disqualification. This application can be filed by members, creditors or even a workman who has been affected by the director’s disqualification. Once the court has granted a disqualification order, it is impossible for the director to be reappointed in the company until the Removal Of Disqualification and unless they rectify their mistake.
