Disqualifications for appointment of director (Section 164 of the Companies Act, 2013) :

According to section 164 of the Companies Act, 2013:

(i) A person cannot be appointed as director of a company in any of the following cases:

(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 6 months and a period of 5 years has not elapsed from the date of expiry of the sentence.

However, if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of 7 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 6 months have elapsed from the last day fixed for the payment of the call;

(g) he has been convicted of the offence of dealing with related party transactions under section 188 at any time during the last preceding 5 years; or

(h) he has not complied with sub-section (3) of section 152 which requires a director to have a Director Identification Number under section 154.

(ii) 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 3 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 1 year or more, shall be eligible to be re-appointed as a director of that company or appointed in other company for period of 5 years from the date on which the said company fails to do so. [Section 164(2)]

Non applicability of section 164(2): Section 164(2) is not applicable to Government company.

(iii) 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) of section 164 as stated above [i.e. point (i) and (ii) above].

However, the disqualifications referred to in clauses (d), (e) and (g) of sub-section (1) [given in point (i) above] shall not take effect—

(a) for 30 days from the date of conviction or order of disqualification;

(b) where an appeal or petition is preferred within 30 days as aforesaid against the conviction resulting in sentence or order, until expiry of 7 days from the date on which such appeal or petition is disposed off; or

(c) where any further appeal or petition is preferred against order or sentence within 7 days, until such further appeal or petition is disposed off.