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Director Disqualification Check
A Director Disqualification Check is a compliance measure under the Companies Act, 2013, to verify whether a director is qualified to hold office. It ensures that directors comply with statutory obligations and have not been disqualified due to non-compliance or legal violations. Disqualified directors cannot hold directorship in any company during the disqualification period, and their DIN (Director Identification Number) may be deactivated.
Director disqualification occurs when a director fails to comply with statutory obligations such as filing annual returns, financial statements, or adhering to other provisions under the Companies Act, 2013. A Director Disqualification Check identifies disqualified directors and ensures that companies remain compliant by addressing such issues promptly.
Important
1. Legal Compliance : Prevents the appointment of disqualified individuals as directors.
2. Protection of Company Interests : Ensures that only qualified individuals manage the company.
3. Avoids Penalties : Prevents the company and its directors from incurring penalties for non-compliance.
4. Transparency : Builds trust among stakeholders and regulatory authorities.
5. Prevents Business Disruption : Ensures continuity of operations by addressing disqualification promptly.
Documents Required
Features
Features & Benefits of Director Disqualification Check
Legal Safeguard
MCA Integration
Non-Compliance Detection
Timely Rectification
Director Disqualification Check
Prevents DIN Deactivation
Proactive Governance
Penalty Mitigation
User-Friendly Process
Court Appeal Options
Comparison with Related Services
| Feature | Director Disqualification Check | Director KYC | Annual Return Filing |
|---|---|---|---|
| Objective | Verify director’s eligibility | Verify director’s eligibility | Report corporate structure |
| Mandatory Requirement | Yes | Yes | Yes |
| Regulatory Authority | MCA | MCA | MCA |
| Frequency | As required | Annually | Annually |
| Penalty for Non-Compliance | High | ₹5,000 and DIN deactivation | High |
| Key Focus | Director compliance history | Identity and contact details | Shareholding and directors |
| Outcome | Active or disqualified status | Maintains active DIN | Maintains company compliance |
| Resolution Timeline | Varies (depending on defaults) | 1-2 days | 30-60 days |
Frequently Asked Questions
How can I check if a director is disqualified?
You can verify a director’s status by searching their DIN on the MCA portal. Disqualified directors will have their DIN marked as inactive.
What happens if a director is disqualified?
A disqualified director cannot act as a director in any company or be reappointed for 5 years. Their DIN may also be deactivated.
Can a disqualified director appeal the decision?
Yes, a disqualified director can file an appeal with the National Company Law Tribunal (NCLT) under Section 252 of the Companies Act.
What is the penalty for appointing a disqualified director?
Companies and directors may face penalties, including fines and prosecution, for appointing or continuing disqualified directors.
How can a disqualified director reactivate their DIN?
A disqualified director can file pending compliance documents and apply for DIN reactivation using Form DIR-10.
What is the role of MCA in director disqualification?
The MCA monitors compliance and issues disqualification notices for directors who fail to meet statutory obligations.