Section 164(2) Director Disqualification
Section 164(2) of the Companies Act, 2013 disqualifies every director of a company for five years if that company has not filed financial statements or annual returns for three consecutive financial years.
Forms to check
Per-year AGM date overrides (3)
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ROC Default & Penalty Exposure
Private Limited Company · Generated by PracticeFlow
| FY | Form | Due date | Days late | Penalty |
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Total exposure: ₹0
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What Section 164(2) actually says
A person is disqualified from being appointed or continuing as a director of any company if the company in which they are a director has not filed financial statements or annual returns for any continuous period of three financial years. The disqualification runs for five years from the date of default and applies to every director of that company — not only the ones responsible for the filing failure — and bars them from directorship in any other company as well, not just the defaulting one.
For a company at exactly three years of unfiled AOC-4 and MGT-7, the accrued additional fee alone is typically well into six figures (roughly ₹1,75,400 for a standard scenario computed against today), and every director is disqualified regardless of whether that fee has been paid.
What it means in practice
A disqualified director cannot be reappointed to the defaulting company, cannot be appointed as a director of any other company for the five-year period, and typically has their DIN flagged accordingly on the MCA system. This is a personal consequence to the individual, separate from whatever the company itself faces (including possible strike-off under Section 248).
The disqualification is triggered by the company's default, not by any individual director's conduct — a director who joined shortly before the third year completes is disqualified along with everyone else on the board, which is why checking a company's filing history before accepting a directorship is a real, practical safeguard.
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See PracticeFlow for CS FirmsEstimate for planning purposes, not legal or compliance advice — always confirm with a CS/CA before relying on any figure or consequence stated here.