Section 316 of the Companies Act, 2013
Section 316 of the Companies Act, 2013 deals with the prohibition of holding office as a director by certain persons.
🔹 Section 316 – Persons Disqualified to be Directors
✅ Key Provisions:
Persons Disqualified from Being Directors:
A person who is:
An undischarged insolvent, or
Has been convicted by a court of any offence involving moral turpitude and sentenced to imprisonment for not less than six months, and has not been rehabilitated, or
Has been convicted of any offence under the Companies Act and has not been rehabilitated,
Rehabilitation:
Rehabilitation can occur if the person obtains a certificate of rehabilitation from the court or any other competent authority.
Effect of Disqualification:
A person who is disqualified shall not hold office as a director in any company.
If such a person is already a director, their office shall be vacated immediately upon disqualification.
🔸 Purpose:
To ensure that individuals with certain serious legal or financial liabilities do not hold directorship positions.
To maintain integrity and trust in corporate governance.
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