Relevant Section

of Companies Requirement
Act, 1956
(1) A person shall not be capable of being appointed director of a
company, if-

(a) he has been found to be of unsound mind by a Court of competent

jurisdiction and the finding is in force;

(b) he is an undischarged insolvent;

(c) he has applied to be adjudicated as an insolvent and his application

is pending;

(d) he has been convicted by a Court of any offence involving moral

turpitude and sentenced in respect thereof to imprisonment for not less
to six months, and a period of five years has not elapsed from the date
of expiry of the sentence;
Section 274 (1)
(e) he has not paid any call in respect of shares of the company held by
Disqualifications of him, whether alone or jointly with others, and six months have elapsed
directors from the last day fixed for the payment of the call; or

(f) an order disqualifying him for appointment as director has been

passed by a Court in pursuance of section 203 and is in force, unless
the leave of the Court has been obtained for his appointment in
pursuance of that section.

(g) such person is already a director of a public company which,-

(A) has not filed the annual accounts and annual returns for any
continuous three financial years commencing on and after the first date
of April, 1999; or

(B) has failed to repay its deposit or interest thereon on due date or
redeem its debentures on done date or pay dividend and such failure
continues for one year or more
Section 203 (1) (1) Where-

Power to restrain (a) a person is convicted of any offence in connection with the
fraudulent persons promotion, formation or management of a company; or
from managing
companies
(b) in the course of winding-up a company it appears that a person-

(i) has been guilty of any offence for which he is punishable (whether he
has been convicted or not) under section 542; or

(ii) has otherwise been guilty, while an officer of the company, of any
fraud or misfeasance in relation to the company or of any breach of his
duty to the company;

the Court or the Tribunal, as the case may be, may make an order that
that person shall not, without the leave of the Court or the Tribunal, as
the case may be, be a director of, or in any way, whether directly or
 indirectly, be concerned or take part in the promotion, formation or
management of a company, for such period not exceeding five years as
may be specified in the order.
Central Government may remove from office any director, or any other
person concerned in the conduct and management of the affairs, of a
Section 388E
Power of Central
company against whom there is a decision of the Tribunal.
Government to
remove managerial The person against whom an order of removal from office is made shall
personnel on the basis not hold the office of a director of any company during a period of five
of Tribunal decision years from the date of the order of removal.

Every director of a company who is in any way, whether directly or

indirectly, concerned or interested in a contract or arrangement, or
proposed contract or arrangement, entered into or to be entered into,
by or on behalf of the company, shall disclose, the nature of his concern
Section 299
or interest at a meeting of the Board of directors.
Disclosure of interest
by director
A general notice given to the Board by a director to the effect that he is
a director or a member of a specified body corporate or is a member of
a specified firm and is to be regarded as concerned or interested in any
contract or arrangement which may, after the date of the notice, be
entered into with that body corporate or firm, shall be deemed to be a
sufficient disclosure of concern or interest in relation to any contract or
arrangement so made.
Section 264 (2)
A person shall not act as a director of the company unless he has within
Consent of candidate
for directorship to be thirty days of his appointment signed and filed with the Registrar his
filed with the company consent in writing to act as such director
and consent to act as
director to be filed
with the Registrar