Section 255 of the Companies Act, 2013
Section 255 of the Companies Act, 2013 relates to the Disqualification for Appointment as Director under certain circumstances.
Here is a summary of Section 255:
Section 255 — Disqualification for Appointment as Director
A person shall not be eligible for appointment as a director of a company if:
He is of unsound mind and stands so declared by a competent court;
He is an undischarged insolvent;
He has applied to be adjudicated as an insolvent and his application is pending;
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;
He has not paid any call in respect of shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last date fixed for the payment of the call;
He has been convicted of the offence dealing with related party transactions under Section 188 at any time during the preceding two years;
He has been disqualified by an order of the Court or Tribunal and the order is in force;
He has not complied with the provisions of Section 164 (which deals with disqualification due to non-filing of financial statements or annual returns);
He has been convicted of an offence under the Act (other than an offence referred in clauses above), and sentenced to imprisonment for a period of seven years or more.
If a person is found to be disqualified under Section 255, his appointment as director is invalid, and if already appointed, he shall vacate the office.
Note: Section 255 is closely linked with Section 164 and other related provisions specifying disqualification criteria.
RELATED Blog
0 comments