Question: Disqualification Of Director Of A Company?
a. Insolvency
b. Fraudulent, declared by court
c. Unsound mind
d. All of the above
Show Answer
All of the above
The disqualification of a director of a company refers to the legal process or conditions under which a person serving as a director is removed or barred from holding a directorship in a company. This can occur due to several reasons, typically stipulated by the corporate laws or regulations of the respective country. Common reasons for disqualification include:
- Bankruptcy: Directors who are declared bankrupt may be disqualified from holding directorships.
- Conviction of a Crime: Involvement in criminal activities, especially those related to financial dishonesty or breaches of trust.
- Failure to File Statutory Documents: Not complying with the legal obligations to file necessary documents with regulatory authorities.
- Director’s Misconduct: Involvement in fraudulent practices, gross negligence, or conduct deemed unfit for a managerial role.
- Conflict of Interest: Engaging in activities that conflict with the company’s interests without proper disclosure.
Disqualification aims to maintain corporate governance standards and protect shareholder interests by ensuring that only fit and proper persons serve in managerial capacities.
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