Hello readers, through this post you will aware about the recent government action regarding Defaulting Directors Which May Punishable for Imprisonment of 10 Years. Key details are :-

  • Directors of shell companies that have not filed their returns for over 3 years would be disqualified from holding such position.
  • The government on Wednesday said that directors or authorised signatories of deregistered companies who try to siphon off money from the firms’ bank accounts can face up to 10 years imprisonment.
  • The directors of shell companies that have not filed their returns for three or more years+ would be disqualified from holding such position in any other firm.
  • The government has also identified chartered accountants, company secretaries and cost accountants associated with shell firms in certain cases.
  • The corporate affairs ministry has struck off the names of more than 2.09 lakh companies from the records as they have not been carrying out business activities for long and banks have been directed to freeze their bank accounts.
  • “In case the director or authorised signatory of any ‘struck off’ company tries to unauthorisedly siphon-off money from its bank account, he/she may attract punishment of imprisonment of not less than six months extendable to 10 years,” an official release said.
  • During a review meeting chaired by Minister of State for Corporate Affairs P P Chaudhary here today, it was also decided that directors of such shell companies which have not filed returns for three or more years, would be disqualified from being appointed in any other company in that position.
  • “It is expected that as a result of this exercise, at least two to three lakh of such disqualified directors shall get debarred,” the release said.
  • Noting that all efforts are also being made to identify the actual beneficiaries and persons behind shell companies, the government said the profiles of directors are being gathered by the agencies.
  • Details such as background, antecedents and their role in the operations/functioning of shell companies are being compiled in collaboration with enforcement agencies.