Penalties Section 164(2) Companies Act — Director Disqualification (Not a Monetary Penalty)
Section 164(2) Companies Act — Director Disqualification (Not a Monetary Penalty)
Companies Act 2013 — 164(2)
A person who is a director of a company that fails to file financial statements / annual returns for 3 consecutive FYs — disqualified from being appointed as director for 5 years (from any company).
The Penalty
5-year disqualification
- Cap
- 5-year period; DIN deactivated
- Calculation base
- Not monetary
- Period
- 5 years from the date of default.
When does this apply?
(a) Director of a company that has not filed AOC-4/MGT-7 for 3 continuous FYs; or (b) failure to repay accepted deposits / redeem debentures on due date for 1+ year.
Calculate this amount
This estimate applies only the rate and caps published in the authored rule for this page.
₹0
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Company A has not filed for FY 22, 23, 24 — director of A also on Board of Company B: disqualified from B and any new appointment | DIN deactivated; 5-year bar | ₹0 |
How it is levied
MCA publishes disqualified-directors lists periodically. Remedies: file writ / apply under CFSS (when open) / restore struck-off company via NCLT.
⚠ VERIFY
Whether the CFSS / other relief scheme currently applies to reinstate a specific director — MCA schemes are windowed. Confirm the operative date.