Section 164 of the Companies Act, 2013 Disqualifications for appointment of director

In force Change proposed — not yet law Explainer reviewed 23 October 2026

Section 164 lists who cannot be appointed a director: for example a person of unsound mind, an undischarged insolvent, or someone convicted and sentenced to six months or more. It also disqualifies, for five years, the directors of a company that has not filed financial statements or annual returns for three continuous financial years or has defaulted on deposits, debentures or dividend.

Who it applies to

Every person being appointed or re-appointed as a director
Directors of companies in filing or repayment default

What the section says

Personal disqualifications (s.164(1)): unsound mind declared by a court; undischarged insolvent; pending insolvency application; conviction with a sentence of six months or more, until five years after the sentence ends (seven years or more means permanently ineligible); a court or Tribunal disqualification order in force; unpaid calls for six months; conviction under section 188 in the last five years; no DIN; or holding directorships beyond the section 165 limit.
Company-default disqualification (s.164(2)): a person who is or was a director of a company that (a) has not filed financial statements or annual returns for any continuous period of three financial years, or (b) has failed to repay deposits, pay interest, redeem debentures or pay declared dividend for one year or more, cannot be re-appointed in that company or appointed in another company for five years from the date of the failure.
A new director joining a company already in such default does not incur the disqualification for six months from appointment (proviso to s.164(2)).
A private company may add further disqualifications in its articles (s.164(3)).
The disqualifications for conviction, a disqualification order and a section 188 conviction continue even if an appeal is pending.

Related sections

Sections this one refers to:

Sections that refer to this one:

143Powers and duties of auditors and...167Vacation of office of director

Common questions

What happens if a company does not file annual returns for three years?

Under section 164(2)(a), every person who is or was a director of that company becomes ineligible for re-appointment there or appointment in any other company for five years. Under section 167, they also vacate other directorships, except in the defaulting company.

Can a new director be disqualified because of the company's past defaults?

A newly appointed director of a company already in default under section 164(2) does not incur the disqualification for six months from the date of appointment.

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Section number, heading and status: Companies Act, 2013 as consolidated on India Code (amendments to about 2020–21). Sources for this page: Companies Act, 2013: India Code consolidated text. Reviewed 23 October 2026. General information, not legal advice; confirm on the official sources before relying on a provision.