Question

Mr. Z is a director of XYZ Limited which failed to repay matured deposits from 1st April, 2012

onwards and the default continues. But ABC Limited is regular in filing annual accounts and

annual returns. Mr. A is also a director of PQR Limited and XYZ Limited.

Answer the following questions with reference to the relevant provisions of the Companies Act,

1956:

(i) Whether Mr. A is disqualified under section 274(1)(g) of the Companies Act, 1956 and if so,

whether he is required to vacate his office of director in PQR Limited and XYZ Limited.

(ii) Is it possible for Board of directors of DEF Limited to appoint Mr. A as an additional director at

the Board meeting to be held on 15th May, 2013?

Would your answer be different if Mr. A ceased to be a director of ABC Limited by resignation on

1st March, 2013? State also the auditor's liability with regard to reporting of disqualification under

section 274(1)(g).​

Answer 1

Answer:

(i)

Explanation:

(i) Whether Mr. A is disqualified under section 274(1)(g) of the Companies Act, 1956 and if so,

whether he is required to vacate his office of director in PQR Limited and XYZ Limited.