Disqualification of directors certainly is a hot topic among professionals practising corporate laws. Irrespectively of popular perception, the list compiled and released by Ministry of Corporate Affairs does not confer any disqualification to any director. These directors were already disqualified. In a serious violation, many of these directors might have failed to communicate about their disqualification to companies appointing or reappointing them after the actual date of disqualification. Such failure has penal consequences. This blog post will discuss serious consequences of the failure of compliance with law and procedures after incurring disqualification by a director.
The government of India in its crackdown against illicit money and money laundering marked 209,032 for removal of names from its register of companies as shell companies. It also disqualified about 200,000 directors. As happens with most bureaucratic exercises in India, present exercise also raised more questions than it answers. There is no definition of shell companies in Indian law. The term shell companies used widely to denote companies used as a vehicle for money laundering or criminal activities. The term itself denotes that main culprit may be someone else.
Life always started to die. The company can be created and wind up. Sometimes, Idea of a company conceives, but fail to take life.
[Law state in this post came into effect from 26 Dec 2016 after a few amendments.]
POWER OF REGISTRAR TO REMOVE NAME (SECTION 248):
Intimation for Removal of Name by the Registrar:
The Registrar may send a notice to the company and all its director of his intention to remove the name of the company from the register of companies when the Registrar has reasonable cause to believe –
Posted in Chapter XVIII - CA2013, Companies Act 2013, Governance and Responsibility
Tagged Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, India, Legal Reforms, Ministry of corporate affairs, Reforms, Removal of name of company, Strike off the name of company, Tribunal