Director Disqualification and Condonation

After MCA disqualifies 3.09 lakhs directors and blocked their director Identification Number. It was then that the aggrieved directors came forward to seek the solution for this issue. As a result of this plea, the Condonation of delay scheme was born. This scheme allowed the directors to temporary avail their position in order to file a plea to the court to regain their position on a permanent basis. IF the director fails through the Condonation of delay scheme, he is going to be barred from being the director for the next 5 years.

There are two conditions in which the director can be disqualified:

1. If the director has failed to file the annual returns and the financial statements for 3 years in a row
2. If the director has not repaid the deposits that they have taken or has not paid any interest or has not paid any debentures. When this happens for 1 whole year, then also the director is closed.

When a director is disqualified, it does not affect the company due to the company’s perpetual nature. In this case, a temporary new director is hired for the time being. The other personnel of the company take this course of action after filing all of the overdue returns. Once they have fulfilled their returns up to the recent date, only then can they hire a new director.

However, what you need here is reinstatement as a director. This is a long and arduous process that you would need assistant to go through. Therefore, Abgps Advisory, through its experience and experts is here to assist you so that you can regain your position as the director of the company.

Procedure Removal of Director Disqualification

1. Drafting a Write Petition
2. Filing your issue with the high court
3. Send your legal representatives
4. Obtain the final order from the court
5. File the compliance documents and adhere to high court’s orders
6. Get reinstated and MCA shall reactivate your DIN

FAQs Removal of Director Disqualification

What happens are all the directors are disqualified?

When all the directors are disqualified under the CODS, then the promoter or the MCA shall step in to hire a new team of directors. The number of these directors would be the same as the ones who are disqualified and they would remain at the position until original directors regain the position.

What to do after the 5 years of disqualification have passed?

After the 5 years of disqualification have passed, the directors have to file an application to the ROC in the form DIR 10 as per rule 14 (5) of the companies Act in order to get their names back on the list.

Documents Required for Removal of Director Disqualification

The documents are different based on the state of the company:

1. With the Condonation of Delay Scheme:
   1. All the documents that are overdue under Section 403
   2. An e-CODS form on MCA 21 portal
2. Without the Condonation of delay scheme:
   1. In case the company was in function
      1. A petition to NCLT
      2. All the documents that are overdue under Section 403
      3. An e-CODS form on MCA 21 portal
   2. In case the company was non-functional
      1. A petition to the high court
      2. An e-CODS form on MCA 21 portal
      3. All the documents that are overdue under Section 403