Four Board Meetings were held during July to December in calendar year 2023. Thunder, a director, attended none of them. For first three meetings he sought leave of absence from the Board but did not inform the Board reg
CS Executive · Company Law · PYQS · June 2024
Four Board Meetings were held during July to December in calendar year 2023. Thunder, a director, attended none of them. For first three meetings he sought leave of absence from the Board but did not inform the Board regarding last meeting as he was hospitalised. In the light of provisions of Companies Act, 2013 examine if he is disqualified to act as a director or otherwise.
Answer & Explanation:
Section 167(1) of the Companies Act, 2013 provides for the cases where the office of a director shall become vacant. Section 167(1)(b) states that the office of a director shall be vacated if he absents himself from all the meetings of the Board of directors held during a period of twelve months with or without seeking leave of absence of the Board. Examining the given case, Thunder, the director absented from all the four meetings of the board held from July to December 2023 by seeking leave of absence in first three and not seeking leave of absence in the last one. It is not that he did not attend all the meetings for a period of twelve months. Thus, his office does not become vacant and he can continue to be a director in the Board. Disqualification of directors is dealt with under section 164 of the Companies Act, 2013 and is different from vacation of office of directors under section 167. Section 167(1)(a) provides that the office of a director shall become vacant in case he incurs any of the disqualifications specified in section 164, which does not include non-attendance of board meetings as a reason for disqualification.
Topics: Directors
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