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Directors - Qualifications & Disqualifications 👔

Definition: A Director is a person appointed to manage the affairs of a company on behalf of shareholders.

Think of it as: Directors are like pilots of the company plane. Shareholders own the plane, but directors fly it.

Who Can Be a Director? ✅

Qualifications (Companies Act, 2013):

Natural Person: Must be a human being (Not a company or firm).
18 Years of Age: Minimum age requirement.
DIN (Director Identification Number): Must obtain unique DIN from MCA (Ministry of Corporate Affairs).
Consent: Must give written consent to act as director.
Not Disqualified: Should not fall under disqualification criteria.

No Maximum Age (from 2018 amendment): Earlier there was 70-year limit. Now removed.

Independent Director Requirements

Independent Directors (outside directors with no financial interest) must have:

Integrity and relevant expertise
No material relationship with company
Not been employee/promoter in last 3 years
Not related to promoter/directors

Purpose: To provide unbiased oversight and protect minority shareholders.

Who CANNOT Be a Director? 🚫

Disqualifications (Section 164):

A person is disqualified if:

Unsound Mind: Declared by court as of unsound mind.
Undischarged Insolvent: Filed for bankruptcy and not cleared.
Conviction: Convicted of offense involving moral turpitude (dishonesty) and sentenced to 2+ years (within 5 years of release).
Non-Payment of Calls: Failed to pay share calls within 6 months.
Disqualified by Court: Court orders disqualification for fraud/misfeasance.
DIN Not Obtained: No valid DIN.

Important: If a person holds DIN in 2 companies that failed to file returns for 3 years, they are disqualified from being appointed in any other company for 5 years.

Number of Directorships Limit 📊

As per Section 165:

Type	Maximum Limit
Public Companies	20 companies (10 as director + 10 as alternate)
Private Companies	No limit on private, but counts toward public limit
Total	Maximum 20 PUBLIC companies

Exception: Directorship in subsidiary/holding company counts as one directorship.

Quiz Time! 🎯

Test Your Knowledge

Question 1 of 5

1. Minimum age to become a director is:

16 years

18 years

21 years

25 years

💡 Final Wisdom: "Being a director is a privilege with responsibility. The law ensures only qualified and honest people can hold this position!" 🎯

Next up: Directors - Appointment & Removal - How to become (or lose) a director! 📋