What are the circumstances that leads to the disqualification of director in India ?

Section 274 states that a person shall not be capable of being appointed director of a company, if:

(i) he has been adjudged to be of unsound mind;

(ii) he is an undischarged insolvent;

(iii) he has applied to be adjudged insolvent;

(iv) he has been convicted by a court and sentenced to at least six months of imprisonment for an offence involving moral turpitude and five years have not elapsed from the date of expiry of the sentence:

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(v) he has failed to pay any call on his shares for six months; and

(vi) he has been disqualified by the court for fraudulent activities in company promotion or management under Section 203,

The disqualifications mentioned in points (iv) and (v) above may be waived by Central Government by notification in the Official Gazette. The Section further authorizes an independent private com­pany to add any other additional disqualifications in its articles for appointment as a director. Implicitly, it means that a public company or a private company which is a subsidiary of a public company can­not prescribe additional disqualifications in its articles, for appoint­ment as a director (of course share qualification can be prescribed as per Section 270).

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