Can a Disqualified Director become Subscriber to the Memorandum in a Company to be incorporated, Corporate Laws / SEBI / LLP

[THYAGARAJAN KALYANASUNDARAM]

Dear All,

Please clarify the following.

Whether a Disqualified Director can become a Subscriber to the Memorandum in a Company to be incorporated? On reading the act I find no restrictions on the same. However, when I practically tried to fill the spice+ form, I'm not able to Associate the DSC of the person who was disqualified as a director in some other company, for signing the MOA as a subscriber to the memorandum.

Can someone guide me on the Act and practical issues faced while signing the MOA.

Thank you in advance for the help.

Posts / Replies

[TANAY GHILDIYAL]

Ofcourse company's ownership is permitted, but if they were to act in one of the following ways it would become extremely tough to avoid a director disqualification breach.

as de facto director (or director “in fact”) who acts as a director, but who hasn’t been formally appointed or recorded as director in the company’s records or at Companies House

as a shadow director who isn’t openly acting as a director, but is instructing another company director in the performance of his or her duties and the direction of the company

as a corporate director who is appointed to sit on the Board

as a non-executive directors who in terms of management and direction of the company and responsibilities, such as the financial affairs of the company, is no different to a formally appointed and registered director

So yes he can be the Subscriber but watch for his further roles to aviod litigation