Removal of Director Disqualification under Section 164(2)
If a company you sat on missed its annual filings for three years in a row, the MCA disqualifies every director on its board for five years. We trace why your DIN is flagged and take the quickest lawful route back onto a board.
What it is
Director disqualification means the law no longer lets you be appointed as a director for a fixed period. The usual cause is not fraud. It is a company that wound down and was never closed, so its filings simply stopped.
Picture a Faridabad trading company that stopped operations in 2021 and never filed AOC-4 or MGT-7 again. Three years later, neither director can join the board of a new venture.
The rule sits in Section 164(2) of the Companies Act, 2013. If a company has not filed its financial statements or annual returns for any continuous period of three financial years, or has failed for a year or more to repay deposits, redeem debentures or pay a declared dividend, each of its directors becomes ineligible for five years. They cannot be re-appointed there or anywhere else, and the MCA flags their DINs on the MCA V3 portal.
Who it applies to
Directors of a company that stopped filing
Any director of a private or public company that missed AOC-4 and MGT-7 for three continuous financial years.
Directors of a struck-off company
When the ROC strikes off a non-filing company under Section 248, its directors often already carry the Section 164(2) flag. Strike-off does not clear it.
Directors of a company in deposit or debenture default
Unpaid deposits, unredeemed debentures or an unpaid declared dividend for a year or more bring Section 164(2)(b) into play.
Why it matters
You lose your other board seats
Under the proviso to Section 167(1)(a), you vacate office in every company except the one in default.
Acting anyway can cost ₹5 lakh
Acting as a director after vacating office invites a fine of ₹1 lakh to ₹5 lakh under Section 167(2).
Your next company has to wait
Every new appointment needs Form DIR-8, a declaration that you are not disqualified. While the flag stands, you cannot honestly sign it.
Documents required
About you
- DIN, PAN and address proof
- Valid DSC
- Companies and LLPs where you are or were a director
About the defaulting company
- CIN and current MCA status
- Bank statements and books for the unfiled years
- ROC notices received
For a tribunal or court route
- Proof the company was in business, such as GST returns
- Affidavits, as the advocate requires
Ways to remove the disqualification
| Situation | Route | What it achieves |
|---|---|---|
| Defaulting company is still active on MCA | File every overdue AOC-4 and MGT-7, with additional fees | Ends the continuing default; needed before any other relief |
| Defaulting company has been struck off | Restoration before the NCLT under Section 252, then the pending filings | Lets the defaults be made good |
| Flag looks wrong, or applied unfairly to you | Writ petition before the High Court, through a practising advocate | Relief on the facts of your case |
| Five years have already passed | Check status, then file DIR-3 KYC Web | DIN returns to “Active” once the period is over |
No single form handles removal of director disqualification under Section 164(2). It arises by operation of law, so the remedy depends on where the company stands today.
How it works
Find out which company triggered the flag
Removal of director disqualification starts with facts. We check your DIN status, every company linked to it and which one triggered the flag. Sometimes it is only a DIN deactivated for missed KYC, a quicker fix.
Bring the defaulting company up to date
We prepare and file the missing financial statements and annual returns year by year, the same annual ROC filings a live company makes. In practice, three unfiled years means three audits first, so we start with whatever bank statements you still have.
Restore the company if it was struck off
A struck-off company cannot file anything. We prepare the restoration of the struck-off company under Section 252 with a practising advocate, then file the pending returns.
Go to the High Court where the facts support it
A practising advocate files the writ petition; we prepare the compliance record behind it.
Get your DIN active and take the next appointment
Once the DIN shows “Active”, we file DIR-3 KYC for your DIN if due, then the DIR-8 and DIR-12 for your next appointment.
Timelines
Five years from the default
The bar lasts five years from the date on which the company failed to file or pay. After that, the MCA changes the DIN status back to Active.
Six months’ grace for new directors
Someone newly appointed to a company already in default gets six months from appointment before the bar applies, under the proviso to Section 164(2).
Three or twenty years to restore
An NCLT appeal lies within three years of strike-off; the company, a member, a creditor or a workman has 20 years.
What happens if you ignore it
Late fees grow every day
AOC-4 and MGT-7 carry an additional fee of ₹100 per day for each form, with no cap. The CCFS-2026 relief scheme ended on 15 September 2026, so full additional fees apply.
Your other boards fall short
Companies that lose you must file DIR-12 and may fall below their legal minimum of directors.
Restoration alone may not clear you
In April 2026 the NCLT Ahmedabad held that restoring a struck-off company does not by itself remove the Section 164(2) disqualification of its directors.
Frequently asked questions
How do I know if my DIN is disqualified?
Before planning any removal of director disqualification, check your DIN on the MCA V3 portal using the View Director Master Data service. A Section 164(2) flag shows against the DIN, and the company that triggered it is listed with its filing history. A deactivated status can also mean you missed DIR-3 KYC Web, which is a separate issue fixed with a ₹5,000 fee. We read both records and tell you which problem you have.
Does filing the overdue returns remove the disqualification immediately?
Not automatically. Section 164(2) bars you for five years from the date the company defaulted, and filing late returns does not rewrite that date. Filing stops the default continuing and gives a court or the MCA a clean record to act on. The returns can be filed at any time, with the ₹100 per day additional fee.
Can I resign from the defaulting company to escape the disqualification?
No, resigning now does not undo a disqualification that has already arisen. The default happened while you were on the board, so the five-year bar attaches to you, and the company still has to file DIR-12 within 30 days of any resignation. Clearing the filings first protects every director on that board at once.
What if the company was struck off by the ROC?
It must be restored before anything can be filed. Under Section 252, an aggrieved person may appeal to the NCLT within three years of the strike-off order, and the company, a member, a creditor or a workman may apply within 20 years. The NCLT filing fee is ₹1,000. For Haryana companies the Chandigarh bench has jurisdiction. Once restored, the pending AOC-4 and MGT-7 forms are filed within the time the Tribunal allows.
Can the High Court set aside a Section 164(2) disqualification?
Yes, in a writ petition where the facts justify it. In Mukut Pathak v. Union of India (4 November 2019), the Delhi High Court held that no prior hearing is needed before disqualification, but found no legal basis to deactivate DINs and DSCs solely for Section 164(2), and ordered reactivation for the petitioners. A practising advocate files and argues it, backed by our compliance record.
Do I lose my position in other companies too?
Yes. Under the proviso to Section 167(1)(a), a director disqualified under Section 164(2) vacates office in all companies other than the one in default. Those companies must file DIR-12 and may need a replacement director to meet the minimum of two for a private company or three for a public company under Section 149(1). Planning the replacement early keeps those boards running.
What happens after the five years are over?
The MCA changes the DIN status from disqualified back to Active. On 10 November 2021 the MCA issued a public notice doing this for directors whose five-year period had ended, and asked them to file DIR-3 KYC. Today you file DIR-3 KYC Web, which is due once every three financial years by 30 June. Once the status shows Active and KYC is current, you can sign DIR-8 and take up a new appointment.
Are any new disqualification rules coming?
Possibly. The Corporate Laws (Amendment) Bill, 2026 proposes new grounds, including a five-year bar for directors of struck-off companies. A Joint Parliamentary Committee tabled its report on 3 August 2026, but the Bill is not yet law. Until it is passed and notified, Section 164 applies as it stands. We will tell you if a pending change affects your plans.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Common government costs:
| Item | Government fee |
|---|---|
| Late AOC-4 or MGT-7 | Normal filing fee plus ₹100 per day of delay, per form |
| NCLT appeal or application under Section 252 | ₹1,000 |
| DIR-3 KYC Web after the due date or DIN reactivation | ₹5,000 |
Audit fees for unfiled years and any advocate’s fee are separate.
Ready to begin?
Send us your DIN and the name of the company that went quiet, and we will tell you which route gets you back on a board.