InstaFinancials is the first company to give information of directors on Disqualified u/s 164(2) and Directors DIN Deactivation.
What is Directors Disqualified u/s 164(2)?
Ministry of Corporate Affairs has struck off over 3 Lakh companies due to non-filing of annual returns for 3 consecutive years during the year 2017 & 2018 and over 5 lakh directors who are associated with such defaulting and non-compliant companies have been disqualified under Section 164(2).
The identification of list of such companies was 1st done in Sept 2017 & the companies that failed to file the returns for FY 2013-14, 2014-5 & 2015-16 has been struck off and the associated are disqualified under the said section of Companies act 2013. Since then, the MCA is scanning such non compliance on regular basis. The intent behind such act of the MCA was to strike off shell company & ensure transparency.
As per the latest notification issued in Nov 2019, if the financials are not filed for the financial year 2015-16, 2016-17 and 2017-18, the directors are considered as disqualified under section 164(2).
As per Ministry of Corporate Affairs Section 164(2) of the Companies Act, 2013, any director who is associated with either 1 or more companies that has not filed financial statements or annual returns for any continuous period of three financials or more is regarded as disqualified directors and such director are not eligible to be appointed as directors of any company till the make good of the non-compliances.
2. No person who is or has been a director of a company which
- has not filed financial statements or annual returns for any continuous period of three financial years; or
- 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.
Consequences of Director Disqualification:
- Any director who are disqualified under Section 164/2 is not eligible to be appointed as directors of any company for a period of five year from the date of disqualification or till they make good of the non-compliances in compliance with the companies act
- the DIN of such directors are not allowed to be used for filing any e-forms on the MCA 21 Portal