Detailed analysis section 164(2) of companies act 2013

section 164(2) of companies act 2013

Detailed Analysis of section 164(2) of companies act 2013- Disqualification by reason of a default made by a company

A person who is or has been director of a company shall be disqualified from being reappointed as a director of that company or appointed in any other company for a period of 5 years, from the date on which his company fails to

  • filled financial statements or annual returns for any continuous 3 Financial years; or
  • has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay the interest due thereon or pay any dividend declared and such failures continue for 1 year or more.


  1. If after the disqualification attracted as per section 164(2) attracted, the default is made good by the company, the director shall continue to be disqualified till 5 years have not elapsed from the date of section 164(2) attracted.
F.Y. Financial Statements Annual return Default/ No default
2016-17 Yes No Default
2017-18 No yes Default
2018-19 Yes No Default
In that case directors are disqualified


Proviso to section 164 (2) of companies act 2013

Provided that where a person is appointed as a director of a company which is in default of clause (a) or clause (b) of section 164(2), he shall not incur disqualification for a period of 6 months from the date of his appointment.


Section 164(2) is not applicable to government companies if it has not default in filling financial statements under section 137 or Annual Return under section 92 of the companies act.

Section 164(2) of Companies Act 2013
Detailed Analysis of Section 164(2) of Companies Act 2013

Priyansh Minocha

Priyansh Minocha is C.E.O and Director at Amonest India Private Limited and Founder at Casolutionsglobal

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