Section 274 of the Companies Act, 2013
Section 274 of the Companies Act, 2013 deals with the Disqualification of Directors.
🔹 Section 274 – Disqualification of Directors
🟡 Key Provisions:
A person shall be disqualified from being appointed as a director, or if already appointed, shall be removed from the Board, if:
He is found to be of unsound mind 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 offense—
Involving moral turpitude, or
Related to fraud, and
Sentenced to imprisonment for not less than six months, during the last five years.
He has not paid any calls on shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the due date.
He has been convicted of any offense under the Companies Act or any other law, and sentenced to imprisonment for not less than one year, during the last five years.
He has been disqualified by an order of the Tribunal under the Companies Act.
He has not complied with the provisions of Section 165 (relating to maximum number of directorships).
⏰ Time Limit for Disqualification:
The disqualification shall last for 5 years from the date of the conviction or non-payment, as applicable.
✅ Objective:
To ensure that only fit and proper persons act as directors and to maintain integrity and credibility in company management.
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