Following persons cannot be appointed as directors of a company (Sec. 274):
(i) A person found by a court to be of unsound mind and the finding is in force.
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(ii) An undischarged insolvent.
(iii) a person who has applied to be adjudged an insolvent and his application is pending.
(iv) A person who has been convicted by a court, whether in India or elsewhere, of an offence involving moral turpitude and sentenced to six months’ imprisonment and a period of five years has not passed from the date of the expiry of the sentence (the Central Government may, however, remove this disqualification).
(v) A person who fails to pay calls when made within six months (the Central Government may remove this disqualification).
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(vi) A person disqualified under Section 203 of the Act, on account of any fraud played in the promotion, formation, management or winding up of the company.
(vii) A person who is already a director of a public company which:
a. Has not filed the annual accounts and annual returns for any continuous 3 financial years commencing on and after the first day of April, 1999; or
b. Has failed to repay its deposit or interest thereon on due date or redeem its debentures on due date or pay dividend and such failure continues for one year or more.
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A private company may by its articles provide for more grounds, in addition to those referred above, on account of which a person shall not be appointed as a director of the company. But in case of public companies and their subsidiaries provisions on additional dis-qualifications will be invalid.