Disqualification of Director

[csstude...@gmail.com]

Hi , 

We are incorporating a private limited company. One of the proposed director is also the designated partner in LLP. But in the LLP they have not filed Annual Returns(Form 11 & Form 8) from 2018. Is there any prohibition to appoint such designated partner as director in new company which we are incorporating now. Please advise.

[Sarvajit S. Yadwad]

Hi,

If DIN status on the date of incorporation of the Company is ACTIVE, you can appoint him as a Director in the Company. However, in the future if LLP fails to file its returns and RoC issues the order of strike off of the LLP, that Director may become disqualified in the LLP as a result of which he will have to vacate his office from the Company as well.

It is better to communicate to the Director the future problems and let them take the decision.

Thanks & Regds,

CS Sarvajit S. Yadwad

9765144257

On Mon, Jan 3, 2022 at 4:29 PM csstude...@gmail.com <csstude...@gmail.com> wrote:

Hi , 

We are incorporating a private limited company. One of the proposed director is also the designated partner in LLP. But in the LLP they have not filed Annual Returns(Form 11 & Form 8) from 2018. Is there any prohibition to appoint such designated partner as director in new company which we are incorporating now. Please advise.

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[pooja Shetty]

Hi,

According to me there is no problem as the LLP has a separate Act altogether and section 164 is only about disqualification in a company.

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Thanks & Regards,

CS Pooja Shetty

8879700499

[Sarvajit S. Yadwad]

Hi CS Pooja,

It is right that LLP and Company have their separate governing laws. However, we have gone through the experience where the Director was disqualified under 164 (2) of the Companies Act and Form 4 of the LLP was not allowing his DPIN due to the disqualified DPIN.

  

Thanks & Regds,

CS Sarvajit S. Yadwad

9765144257

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[pooja Shetty]

Hi  CS Sarvajit,

I totally agree with the problem you must have faced due to disqualification under section 164 (BUT THAT WAS DUE TO NON-FILING DONE BY A COMPANY FOR 3 YEARS and NOT LLP AND SINCE THE DIN AND DPIN AS THE SAME FOR A PERSON YOUR FORM WOULD HAVE THROWN THE ERROR) SO YOUR CASE WAS VICE-VERSA.

Now, The query raised by the person is whether the disqualification under section 164 also covers llp non-filing.. Accordingly, the answer is NO.. As non of the Partners/designated partners can be disqualified if the LLp return is not filed as per llp Act as on date SINCE LLP ACT HAS NO SUCH MENTION AND NOR DOES SECTION 164 COVERS BODY CORPORATE IT ONLY COVERS "COMPANY")

SO, WE CAN APPOINT THE PERSON AS A DIRECTOR IN ANY COMPANY INCLUDING INCORPORATION EVEN IF THE LLP IN WHICH HE IS PARTNER OR DP HAS NOT FILED THE RETURNS FOR 3 YEARS.

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[Sarvajit S. Yadwad]

Hi CS Pooja,

Yes, as on date, we can appoint him as a Director. 

I was talking about the future situation.

Thanks & Regds,

CS Sarvajit S. Yadwad

9765144257

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