Tarak, is an engineer by qualification and is part of many start-ups. During the initial start-up days, he had been part of few companies, which were floated by his friends and close relatives. Currently he is a Director

CS Professional · Multidisciplinary Case Studies · PYQS · June 2024
Tarak, is an engineer by qualification and is part of many start-ups. During the initial start-up days, he had been part of few companies, which were floated by his friends and close relatives. Currently he is a Director on the Board of four companies including Jay Grains Ltd (JGL) and Vijaya Tech Ltd (VTL). JGL did not file its financial statements for the year ended on 31st March, 2021, 2022 and 2023 respectively with the Registrar of Companies (ROC) as mandated by the Companies Act, 2013. JGL's name was struck-off from the ROC on 28th January, 2024 due to the non- filing of financial statements and annual returns. Tarak's DIN and DSC were also cancelled subsequently. Due to this, Tarak was unable to carry on the business and file returns etc., in other Companies wherein he was a director. In view of above facts, answer the following: Whether Tarak is disqualified under the provisions of Companies Act, 2013?

Answer & Explanation:

As per Sec 164(2) of the Companies Act, 2013, No person who is or has been a director of a company which- has not filed financial statements or annual returns for any continuous period of three financial years; or has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more, shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so. Thus, from the above discussion it is clear that Tarak is disqualified as per Sec 164(2) of the Companies Act, 2013.

Topics: Company Law

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