Ms. Mansi was the properly appointed director of Excellent Ltd. Subsequently, the company altered its articles of association and made it a compulsory qualification for the director to be a qualified Company Secretary. M

CS Professional · Secretarial Audit, Compliance Management and Due Diligence · PYQS · June 2015
Ms. Mansi was the properly appointed director of Excellent Ltd. Subsequently, the company altered its articles of association and made it a compulsory qualification for the director to be a qualified Company Secretary. Ms. Mansi, not being a qualified Company Secretary, was asked to vacate the office. Decide whether the action of Excellent Ltd. is valid as per the relevant provisions of the Companies Act, 2013.

Answer & Explanation:

The problem given in the question is related to disqualification of director or vacation of office of director as Ms. Manasi has already been duly appointed as a director. The provisions relating to disqualification for appointment of directors are envisaged under section 164 of the Companies Act, 2013. Although as per provisions of Section 164(3), Private Limited Company may by its articles provide for additional disqualification in addition. In the given case Excellent Limited is a public company and although they have altered its articles of association, but Ms. Manasi is not disqualified as she is not falling under the grounds mentioned under section 164 for the said purpose. Therefore, Section 167(1)(a) which provides for vacation, if disqualified under Section 164 also will not apply. Thus the action taken by Excellent Ltd. is not valid as it is not in accordance with the provisions of the companies Act, 2013.

Topics: Companies Act, 2013

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