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Disqualification of Managing Director

In accordance with the section 196(3) of the companies act 2013, a company shall not appoint (or continue the employment) of any person as managing director, whole-time director or manager of the company, if that person is falling under any of the conditions mentioned below.

  1. That person is below 21years or has attained 70 years age;
    • A person who is of 70 years or more can still be appointed by passing of a special resolution.
  2. That person has at any time suspended payment to his creditors or makes, or has at any time made, a composition with them; or 
    • has at any time been convicted by a court of an offence and sentenced for a period of more than 6 months.
  3. That person is an undischarged insolvent or has been adjudged as an insolvent.
Notes:
Earlier similar provisions were prescribed under section 267 of the companies act 1956.


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