Over 2 lakh directors to be barred from being board member in any new venture
This news has been a buzz in the market and has put entrepreneurs and business owners in a tensed situation. Over 2 lakh directors to be barred from board posts for not complying in RoC filing. With reference to this article covered on Economic Times, we will be covering exclusively all the facts that you as a business owner and a director should know
Why were these directors name stricken off?
- For not filing returns and
- For not completing other formalities related to compliance after show-cause notice was served.
The Directors whose names have been barred:
- Cannot hold any board position in new ventures
- They will not have to step down from the board of other companies on which they are currently directors.
- The law allows the government to bar these directors from taking up any board position for five years
- In addition, their directorship on other boards is not being disturbed
What founders should learn from this incident?
- If you think the company is not moving towards a positive growth, change the company status either to Dormant Status or Close.
- Be compliant with RoC filing.
- Send well-thought response (after taking required advice from a Lawyer) to MCA notice before the deadline.
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