Director disqualification under the Companies Act, 2013 comes from one section, Section 164, but it works in two very different ways. Section 164(1) looks at the person: insolvency, a criminal conviction, a court order, a missing DIN. Section 164(2) looks at the company: if a company you are or were a director of stops filing its financial statements or annual returns, you can be barred from directorships for five years even though you did nothing personally wrong. This guide explains both, what happens to your other directorships, how DIN deactivation fits in, and the realistic routes to relief.
Section 164(1): Personal Grounds
Under Section 164(1), a person is not eligible to be appointed as a director of any company if:
- (a) he is of unsound mind and stands so declared by a competent court;
- (b) he is an undischarged insolvent;
- (c) he has applied to be adjudicated as an insolvent and the application is pending;
- (d) he has been convicted of any offence and sentenced to imprisonment of at least six months, and five years have not passed since the sentence expired. If the sentence was seven years or more, he can never be appointed a director;
- (e) a court or Tribunal has passed an order disqualifying him and the order is in force;
- (f) he has not paid calls on shares of the company held by him and six months have passed since the last date fixed for payment;
- (g) he has been convicted of the offence relating to related party transactions under Section 188 in the last five years;
- (h) he has not complied with Section 152(3), that is, he does not hold a Director Identification Number (DIN);
- (i) he has not complied with Section 165(1), that is, he holds more directorships than the law allows.
For grounds (d), (e) and (g), the disqualification does not take effect for 30 days from the conviction or order, and if an appeal or petition is filed within that time, it is held back until the appeal is disposed of.
A private company may also add further disqualifications in its articles of association (Section 164(3)).
Section 164(2): Disqualification Because of the Company's Default
Section 164(2) applies to every person who is or has been a director of a company that:
- has not filed financial statements or annual returns for any continuous period of three financial years; or
- has failed to repay deposits, pay interest on them, redeem debentures on the due date, pay interest on debentures, or pay a declared dividend, and the failure has continued for one year or more.
Such a person cannot be re-appointed as a director of that company, or appointed as a director of any other company, for five years from the date on which the company fails to file or pay.
Two points are often missed:
- New directors get six months. A person appointed as a director of a company that is already in default does not incur the disqualification for six months from the date of his appointment (proviso to Section 164(2)). This gives an incoming director time to get the filings done.
- There is no separate order. The disqualification flows from the Act itself once the default period is complete. In practice, MCA's registry marks the DIN as disqualified, and the director usually discovers it when a form is rejected or the DIN shows as disqualified on the MCA portal.
What Happens to Your Other Directorships (Section 167)
Under Section 167(1)(a), the office of a director becomes vacant when he incurs any disqualification under Section 164. For a Section 164(2) disqualification, the proviso to Section 167(1)(a) says the office becomes vacant in all companies other than the company that is in default. So a director of the defaulting company stays on its board (which allows the company to file the overdue returns), but loses his seats on the boards of other companies.
Section 167(1) also lists other events that vacate the office, such as absence from all board meetings for twelve months, failing to disclose interest in contracts under Section 184, and conviction with imprisonment of at least six months.
If a person keeps acting as a director knowing that his office has become vacant, Section 167(2) provides for imprisonment of up to one year, or a fine of Rs 1 lakh to Rs 5 lakh, or both. If all the directors of a company vacate office, Section 167(3) allows the promoter, or failing him the Central Government, to appoint the required number of directors until the company appoints directors in general meeting.
Limit on Directorships (Section 165)
Section 165(1) allows a person to be a director in at most 20 companies at the same time, of which not more than 10 can be public companies. Directorships of private companies that are holding or subsidiary companies of a public company count towards the public company limit, and directorships in dormant companies are not counted. Breaching the limit is itself a disqualification ground under Section 164(1)(i).
DIN Deactivation Is Not the Same as Disqualification
Many directors confuse two different statuses on the MCA portal:
- Disqualified under Section 164(2): the result of the company's filing or repayment default, as explained above. It runs for five years.
- Deactivated for non-filing of DIR-3 KYC: the result of the director's own KYC not being filed. It is not a disqualification under Section 164. The DIN is reactivated when the director files the KYC form with the late fee (Rs 5,000).
From 31 March 2026, the Companies (Appointment and Qualification of Directors) Amendment Rules, 2025 (G.S.R. 943(E) dated 31 December 2025) changed DIR-3 KYC from an annual filing to once every three financial years. A person holding a DIN as on 31 March of a financial year files the KYC in Form DIR-3-KYC-Web by 30 June of every third consecutive financial year, and changes in mobile number, email or residential address are updated through the same form within 30 days of the change. See our DIR-3 KYC due date guide for who must file in 2026.
Disclosures Directors Must Make
- Form DIR-8: every director gives the company an intimation in Form DIR-8 that he is not disqualified under Section 164(2). It is given to the company, not filed with the ROC.
- Form DIR-12: the company files this with the ROC when a director is appointed, resigns or his office is vacated. See our Form DIR-12 guide.
- Form DIR-11: a director who resigns may send a copy of his resignation to the ROC in Form DIR-11, which puts the resignation date on record.
How to Check Whether You Are Disqualified
- MCA portal: use the DIN or director master data service on mca.gov.in to see the DIN status and the companies linked to it.
- Company filing status: check the master data of each company you are or were a director of. If financial statements (AOC-4) or annual returns (MGT-7 or MGT-7A) are missing for three continuous years, Section 164(2) is likely to apply.
- Rejected forms: a DIN marked as disqualified usually shows up when you try to sign or be appointed through an MCA form.
Routes to Relief
There is no general appeal to the ROC against a Section 164(2) disqualification. The practical options are:
- Get the defaulting company compliant. File all overdue financial statements and annual returns with additional fees. This stops the default from continuing and is the starting point for every other remedy.
- One-time MCA schemes, when announced. The Condonation of Delay Scheme 2018 (General Circular 16/2017 dated 29 December 2017) temporarily reactivated the DINs of disqualified directors so that defaulting companies could file their overdue documents and then seek condonation through Form e-CODS 2018. MCA runs such schemes only occasionally; the most recent, the Companies Compliance Facilitation Scheme 2026, closed on 15 September 2026. Check MCA's circulars for any currently open scheme before relying on one.
- Revival of a struck-off company. If the defaulting company has been struck off, it can be restored by an application to the National Company Law Tribunal under Section 252, after which the overdue filings can be made.
- Writ petition in the High Court. Directors whose DINs were marked disqualified mechanically have approached High Courts under Article 226. Outcomes depend on the facts and the jurisdiction, so this needs a lawyer's advice on your specific case.
- Waiting out the period. The Section 164(2) bar runs for five years from the date of the company's default, after which the person is again eligible for appointment, provided no fresh default has occurred.
Practical Checklist
- Check the filing status of every company in which you are, or in the last few years were, a director.
- If a company is close to three years of missed AOC-4 or MGT-7 filings, get the filings done before the third year's due date passes.
- Before joining the board of a company with pending filings, plan to clear them within six months of your appointment.
- Resign formally from companies you no longer manage, and file DIR-11 so the date is on record.
- Keep your DIR-3 KYC up to date so that your DIN is not deactivated.
For help bringing a company's ROC filings up to date, see our ROC annual compliance guide.
Sources: Companies Act, 2013, Sections 152, 164, 165, 167 and 168, as amended by the Companies (Amendment) Act, 2017; Companies (Appointment and Qualification of Directors) Rules, 2014, as amended by G.S.R. 943(E) dated 31 December 2025; MCA General Circular 16/2017 (Condonation of Delay Scheme 2018).
