Impact of Disqualification by RoC on a Director’s Career

“Most great people have achieved their greatest success just one step beyond their greatest failure.”

If you are a director of a company, then you must be aware of the norms in the Companies Act 2013, which could lead to the disqualification of directorship for five years. If a company fails to file its financial statements and other relevant documents for a continuous period of three years then it could be struck off from ROC and its directors can be disqualified for five years. The intention of the Government behind this is to fight the menace of black money created by shell companies. However, these actions could deeply impact the careers of directors as a five-year ban from directorship could prove to a lot. 

Here is the impact disqualification could have on a directors’ career,

• The Ministry of corporate affairs has clearly stated that the directors once disqualified will be rendered ineligible for appointment in any other company for five years. This could mean an exile of five years from an illustrious corporate career. 
• The liability of a company after being struck off remains with the directors even after their disqualification. 
• The directors face may also face huge penalties due to non-compliance of RoC rules. 
• If a director continues to be on the directorship even after disqualification then he/.she could face imprisonment of one year or a fine of 1 lakh to 5 lakh. 
• The office of the director becomes vacant after disqualification.

In conclusion, 

We can say that the directors’ disqualification not just halts the career of directors, it could also lead to them facing penalties or in some cases imprisonment. To avoid all these penalties and disqualification, the directors are advised to ensure the furnishing of all the relevant documents of their company to the RoC and follow all the norms of the Companies Act. If any director thinks that their disqualification from directorship was unreasonable, then they can approach a legal firm for advice on the removal of disqualification. There are several ways through which director disqualification could be removed and a legal firm could assist him in choosing the best way for the removal of disqualification.

“There is time for a fight and a time for a flight; knowing the right time to do one or the other can mean the difference between life and death”

― Bangambiki Habyarimana, Pearls Of Eternity

Author: Adv Sharlee Garg
Muds Management Private Limited
Mobile number: 91-9599653306
Email id: [email protected]