Removal of Directors Disqualification

Drafting of Writ Petition
Filing of application with the High Court
Appearances by Advocates and pleadings for the same
Filing order of High Court and pending compliance documents with Respective ROC

Who is Disqualified Director?

In accordance with the Companies Act, 2013:-

A director will be disqualified if he has failed to file financial statements or annual returns for consecutive 3 financial years; or if he has made default in payment of deposits or interest thereon, such failure in relation to payment or redemption has taken place for one year or more; or
From the date of disqualification, such disqualified director shall not be eligible to be re-appointed as a director in such company or any other company for a consecutive period of 5 years. 

What are true ways for Removal of Director Disqualification?

Now, let’s discuss the process of removal of director disqualification on the basis of two below mentioned cases;

Case 1: When Company was Active or Board wants to revive the Company
  • In this case, application will be filed before NCLT;
  • File necessary documents with the Registrar.
Case 2: When Company was not functioning nor Board wants to revive the Company
  • In case company ceases to carry out its operations, petition will be made with High Court;
  • Overdue Documents as per section 403;
  • File necessary documents with the Registrar

Main process for Removal of Director Disqualification

For the purpose of removal of director disqualification, following below mentioned steps will be taken:

  • Legalforever will draft a writ petition which will be subsequently filed with the high court;
  • An advocate will appear for the pleadings;
  • High Court will give an interim order;
  • Thereafter order of the High Court will be filed with the registrar of Companies along with the pending compliance documents;
  • DIN will be activated and disqualification will be removed
Time involved:

The whole process will take around 10 days.  Legalforever can complete the process on your behalf as we have a team of experienced professionals. 

Impact of Disqualification on Directors & Companies:-

Here are the following implications on the directors of disqualification:

  • The decision of the authority of disqualification of Directors led to deregistration of DINs of directors hence it’s jeopardized the career of directors.
  • This decision has barred disqualified directors for the period of 5 years. The directors cant became the director in a new company nor in existing company
  • Disqualified directors are not permitted to operate company’s accounts.
  • Directors are not only disqualified from the company which has not complied with the prescribed rules & regulations but also from other companies in which they are on board of directors.

With this decision there are many companies which are in trouble without any fault.

What to be done in case you don’t want to revive the Company only want to revive the DIN of Disqua

For the removal of director disqualification, a writ petition can be filed in high court.
A write petition be filed in high court to get the immediate interim relief even in case you don't want to revive the company or company is not carrying operations as well as when bank account is not available.

For removal of director disqualification, director may approach respective High Court on the ground that before taking any action against him opportunity of being heard was not provided. On the basis of the facts and circumstances of each case, high court may remove director disqualification or grant interim stay order.
Therefore we can file writ petition with the High Court under Article 226 of the Constitution of India. On this, High Court may pass stay order on the list of disqualified directors. On the basis of the stay order, the DIN and DSC of director can be reactivated by the concerned ROC once copy of the writ petition is filed with the ROC along with the stay order and cover letter.

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