Can a Disqualified Director become Subscriber to the Memorandum in a Company to be incorporated

[THYAGARAJAN KALYANASUNDARAM]

Dear All,

Please clarify the following.

Whether a Disqualified Director can become a Subscriber to the Memorandum in a Company to be incorporated? On reading the act I find no restrictions on the same. However, when I practically tried to fill the spice+ form, I'm not able to Associate the DSC of the person who was disqualified as a director in some other company, for signing the MOA as a subscriber to the memorandum.

Can someone guide me on the Act and practical issues faced while signing the MOA.

Thank you in advance for the help.

[TANAY GHILDIYAL]

Ofcourse company's ownership is permitted, but if they were to act in one of the following ways it would become extremely tough to avoid a director disqualification breach.

as de facto director (or director “in fact”) who acts as a director, but who hasn’t been formally appointed or recorded as director in the company’s records or at Companies House

as a shadow director who isn’t openly acting as a director, but is instructing another company director in the performance of his or her duties and the direction of the company

as a corporate director who is appointed to sit on the Board

as a non-executive directors who in terms of management and direction of the company and responsibilities, such as the financial affairs of the company, is no different to a formally appointed and registered director

So yes he can be the Subscriber but watch for his further roles to aviod litigation

AI Summary

Disqualified director may subscribe to memorandum but must avoid acting as de facto, shadow, corporate or non executive director. A disqualified director is not expressly prohibited from subscribing to a company's memorandum and may hold ownership, but must avoid conduct that constitutes acting as a director-such as functioning as a de facto director, shadow director, corporate director, or performing non executive director duties-as those roles risk breaching director disqualification rules; practical issues with digital signature association on incorporation forms were also observed.