Q.State the disqualifications for appointment of a director under Section 164(1) of the Companies Act, 2013.

The Act does not list positive qualifications for an ordinary director, but it lists disqualifications in careful detail — grounds that bar a person from appointment regardless of what the shareholders might otherwise want.

Rather than prescribing positive educational or professional qualifications for the general run of directors, the Companies Act, 2013 takes the more targeted approach of listing the specific circumstances in which a person is legally barred from becoming a director at all — disqualifications that operate regardless of how capable or trustworthy the shareholders might otherwise consider the individual.

Section 164(1) sets out these disqualifications for appointment. A person cannot be appointed a director if: he is of unsound mind and stands so declared by a competent court; he is an undischarged insolvent; he has applied to be adjudicated an insolvent and his application is pending; he has been convicted by a court of any offence, whether or not involving moral turpitude, and sentenced to imprisonment for not less than six months, and a period of five years has not elapsed from the date of expiry of the sentence (the Act imposes a longer bar, without any five-year cut-off, where the sentence imposed is for a period of seven years or more); he has been convicted of an offence dealing with related-party transactions under Section 188 at any time during the preceding five years; he has not obtained a Director Identification Number; or he has failed to pay any call in respect of shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for payment of the call. …