What disqualifies a director under section 164?
What disqualifies a person from being a director under section 164 of the Companies Act, 2013: the personal grounds in sub-section (1), the non-filing and default trigger in sub-section (2), the five-year disqualification, and how it links to DIN deactivation and Form DIR-8.
In this guide
Section 164 of the Companies Act, 2013 lists when a person cannot be appointed or continue as a director. Sub-section (1) covers personal grounds such as being of unsound mind, an undischarged insolvent, or convicted of an offence with imprisonment of six months or more. Sub-section (2) disqualifies a director of a company that fails to file financial statements or annual returns for three continuous years, for five years.
What does section 164 cover?
Section 164 of the Companies Act, 2013 sets out when a person cannot be appointed or continue as a director. It has two main limbs. Sub-section (1) lists personal grounds tied to the individual, such as insolvency or conviction. Sub-section (2) disqualifies a director because of a company's filing or repayment default, regardless of the director's own conduct.
The two limbs work differently. A 164(1) ground attaches to the person and follows them. A 164(2) ground attaches because a company defaulted, and it can catch a director who did nothing wrong personally but sat on the board of a defaulting company.
What are the personal grounds in 164(1)?
Section 164(1) disqualifies a person on personal grounds. These include being of unsound mind as declared by a court, being an undischarged insolvent, having applied to be adjudicated insolvent with the application pending, and being convicted of an offence with a sentence of imprisonment of at least six months where five years have not elapsed since the sentence ended.
Other grounds in sub-section (1) include an order disqualifying the person from appointment that is in force, non-payment of calls on shares for six months, conviction for a related-party-transaction offence under section 188 in the preceding five years, and failure to obtain a Director Identification Number. A conviction for an offence involving moral turpitude with the six-month sentence carries the same disqualifying effect.
Is a conviction ever a permanent bar?
Yes. The proviso to section 164(1)(d) of the Companies Act, 2013 makes a person convicted and sentenced to imprisonment for seven years or more permanently ineligible for appointment as a director. Below that, the five-year clock in section 164(1)(d) runs from the expiry of the sentence, and a pending appeal suspends the disqualification for a further seven days under the second proviso.
What triggers disqualification under 164(2)?
Section 164(2) disqualifies a director of a company that has committed one of two defaults. The first is failing to file financial statements in Form AOC-4 or annual returns in Form MGT-7 for three continuous financial years. The second is failing to repay deposits, redeem debentures, or pay interest or declared dividends for a year or more. Either default triggers the disqualification.
The important point is reach. A director disqualified under 164(2) cannot be reappointed in the defaulting company and cannot be appointed in any other company for the disqualification period. One company's three-year filing default can therefore end a director's positions across several boards.
Does 164(2) catch a director who has already resigned?
It can. Section 164(2) of the Companies Act, 2013 speaks of a person who is or has been a director of the defaulting company, so a resignation does not by itself clear a person for the years already inside the three continuous years of non-filing. Test the company's AOC-4 and MGT-7 record against the dates in office rather than assuming the resignation date ends the exposure.
How long does a section 164 bar last?
Five years, in both of the main cases. A section 164(2) disqualification lasts five years from the date the company defaults. A 164(1)(d) conviction ground runs five years from the end of the sentence, and permanently where the sentence is seven years or more.
| Ground | Source | Duration |
|---|---|---|
| Company default in filing or repayment | Section 164(2) | 5 years from the default |
| Conviction with 6-month sentence | Section 164(1)(d) | 5 years from end of sentence |
| Conviction with 7-year sentence or more | Proviso to section 164(1)(d) | Permanent ineligibility |
| Undischarged insolvent | Section 164(1)(b) | While the status continues |
How does disqualification affect a DIN?
A disqualification under section 164 shows up as a blocked Director Identification Number. When a company defaults under 164(2), MCA can deactivate the DINs of its directors, and a deactivated DIN cannot sign an e-form for any company until the position is cured.
A director gives Form DIR-8 to the company under rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, declaring that no section 164 disqualification applies, before appointment or reappointment and at the start of each financial year. The company relies on that declaration, so a false or stale DIR-8 is a real exposure.
What keeps a DIN active year to year?
Form DIR-3 KYC, filed by 30 September each year under rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014. A DIN that misses that date is marked deactivated for non-filing of KYC and is reactivated only on filing the form with a fee of ₹5,000. This is separate from a section 164 disqualification, but it stops a director signing just as effectively.
How do I check a director's disqualification?
- Open the section 164 text and read sub-sections (1), (2), and (3) for the grounds and the periods.
- Check the company's AOC-4 and MGT-7 filing history for three continuous financial years of missed filings.
- Check for any unpaid deposit, debenture, or declared-dividend default that has run for a year or more.
- Confirm the DIN status on the MCA portal, including whether DIR-3 KYC is current for the year, before making an appointment.
- Collect a Form DIR-8 declaration under rule 14(1) from every director being appointed or reappointed.
Why are directors caught out by 164(2)?
- Treating 164(2) as a problem only for the defaulting company, when it blocks appointment in every company for five years.
- Assuming a director is safe because they personally did nothing wrong. A company default under 164(2) still disqualifies.
- Reading a resignation as an exit, when 164(2) reaches a person who has been a director of the defaulting company.
- Appointing a director without a current Form DIR-8 declaration under rule 14(1).
- Missing that a private company's articles can add grounds under section 164(3).
- Confusing a DIR-3 KYC deactivation with a section 164 disqualification, and curing the wrong one.
Where do section 164 changes appear?
Section 164 sits in the Companies Act, 2013, and the DIN, KYC and filing rules around it move through MCA notifications. Complied AI keeps MCA updates in one feed so you can open the notification behind a rule or form change, then read section 164 next to it when you need the exact disqualification wording.
Practical checks
Common questions
What disqualifies a director under section 164(2)?
Section 164(2) of the Companies Act, 2013 disqualifies a director of a company that has not filed financial statements or annual returns for three continuous financial years, or that has failed to repay deposits, redeem debentures, or pay declared dividends for a year or more. The trigger is the company's default, not the director's personal conduct.
How long does director disqualification last?
Disqualification under section 164(2) of the Companies Act, 2013 lasts five years from the date on which the company defaults. Through those five years the person cannot be reappointed as a director of the defaulting company and cannot be appointed in any other company either.
What is the imprisonment threshold under section 164(1)?
Six months. Section 164(1)(d) of the Companies Act, 2013 disqualifies a person convicted of any offence and sentenced to imprisonment for at least six months, and the bar runs for five years from the end of the sentence. Where the sentence is seven years or more, the proviso makes the person permanently ineligible for appointment as a director.
Does a 164(2) disqualification affect other directorships?
Yes. A director disqualified under section 164(2) of the Companies Act, 2013 cannot be appointed in any other company for the five-year period, not only in the defaulting company. This is the wide effect that catches a person sitting on several boards when one of those companies misses three years of filings.
What is Form DIR-8?
Form DIR-8 is the declaration a director gives the company under rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, confirming that no section 164 disqualification applies. It is given before appointment or reappointment and again at the start of each financial year, and the company relies on it.
I resigned from a company two years ago and it has now missed three years of filings. Am I disqualified?
It depends on the dates. Section 164(2) of the Companies Act, 2013 catches a person who is or has been a director of the defaulting company, so a former director can be inside the net if the three continuous years of non-filing include years in office. Check the company's actual AOC-4 and MGT-7 filing record year by year before assuming either way.
MCA has deactivated my DIN. Can I still sign as a director elsewhere?
No. A deactivated Director Identification Number blocks e-filings in every company, so the director cannot sign forms anywhere until the position is cured. The company files Form DIR-3 KYC each year by 30 September under rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014, and a lapsed KYC is reactivated on filing with a ₹5,000 fee.
Can a private company add extra disqualification grounds?
Yes. Section 164(3) of the Companies Act, 2013 lets a private company provide by its articles for additional grounds of disqualification beyond sub-sections (1) and (2). The statutory grounds are the floor, so read the articles alongside section 164 before clearing an appointment in a private company.
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How this guide was prepared
This guide is published by the Complied AI research desk. Its source list and stated position were checked against the official records shown below on 3 September 2026.
Automation, including AI, may assist research, drafting and structure. It does not replace the official record or amount to an independent professional review. Read our editorial standards and corrections policy.
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