The sections, word for word
Every section on this subject, exactly as printed in the Official Gazette (Act No. 3 of 2020). The explanation follows beneath.
Section 279. Provisions as to insolvent persons acting as directors
(1) If any person, being an insolvent person, acts as director of or directly or indirectly takes part in, or is concerned in the management of any company, he commits an offence and is liable on conviction to a fine as the Court deems fit, or imprisonment for a term of at least six months but not more than two years, or both.
(2) In this section, “company” includes an unregistered company.
Section 280. Restraint of fraudulent persons
(1) Where—
(a) a person is convicted by a High Court of any offence in connection with the promotion, formation or management of a company, or
(b) in the course of winding-up a company, it appears that a person—
(i) has been guilty of any offence for which he is liable (whether he has been convicted or not) under sections 668-670 of this Act, or
(ii) has been guilty of any offence involving fraud, the court shall make an order that that person shall not be a director of or in any way, whether directly or indirectly, be concerned or take part in the management of a company for a specified period not exceeding 10 years.
(2) The period of disqualification referred to in subsection (1) shall commence after the sentence for the offence has been served or on the date the fine for the offence is paid.
(3) In this section, the “High Court and the court”, where used in relation to the making of an order against any person by virtue of subsection (1) ( includes the court before which he is convicted, as well as any court having jurisdiction to wind up the company, and in relation to the granting of leave means any court having jurisdiction to wind up the company as respects which leave is sought.
(4) A person intending to apply for the making of an order under this section by the court having jurisdiction to wind-up a company shall give at least 10 days’ notice of his intention to the person against whom the order is sought, and on the hearing of the application, the last mentioned person may appear in person and give evidence or call witnesses.
(5) An application for the making of an order under this section by the court having jurisdiction to wind-up a company, may be made by the official receiver, the liquidator of the company or person who is or has been a member or creditor of the company, and on the hearing of any application for an order under this section by the official receiver or the liquidator, or of any application for leave under this section by a person against whom an order has been made on the application of the official receiver or liquidator, the official receiver or liquidator shall appear and call the attention of the court to any matter which seem to him to be relevant, and may himself give evidence or call witnesses.
(6) An order may be made by virtue of subsection (1) ( notwithstanding that the person concerned may be criminally liable in respect of the matters on the ground of which the order is to be made, and for the purposes of the said paragraph (b) (ii), “officer” includes any person in accordance with whose directions or instructions the directors of the company have been accustomed to act.
(7) If any person acts in contravention of an order made under this section, he commits an offence and in respect of each offence, is liable on conviction to a fine as the Court deems fit or to imprisonment for a term of at least six months or more than two years, or both.
Section 281. Appointment of director for life
A person may be appointed a director for life provided that he shall be removable under section 288 of this Act.
Section 282. Right to appoint a director at any age
Subject to the provisions of this Act, a person may be appointed a director of a public company notwithstanding that he is 70 years or more of age but special notice shall be required of any resolution appointing or approving the appointment of such a director for the purposes of this section, and the notice given to the company and by the company to its members shall state the age of the person to whom it relates.
Section 283. Disqualification for directorship
The following persons shall be disqualified from being director—
(a) an infant, that is, a person under the age of 18 years ;
(b) a lunatic or person of unsound mind ;
(c) a person suspended or removed under section 288 of this Act ;
(d) a person disqualified under sections 279, 280, 284 of this Act ; and
(e) a corporation other than its representative appointed to the board for a given term.
What this means
Short answer
Section 283 disqualifies a person under 18, a person of unsound mind, a person suspended or removed under section 288 (the 2023 amendment limits the removal ground to removal for fraud, dishonesty or unethical conduct), a person disqualified under sections 279, 280 or 284, and a corporation other than its appointed representative. The court can also bar a person from running companies for up to 10 years (section 280).
Amended since the gazette
Section 283(c) now disqualifies a person removed under section 288 only if the removal was on grounds of fraud, dishonesty or unethical conduct. The gazetted text had no such limit. See all the amendments.
Who is disqualified
Section 283 lists the people who cannot be directors:
- an infant, meaning a person under 18;
- a person of unsound mind;
- a person suspended or removed under section 288 (the 2023 amendment limits the removal ground to removal for fraud, dishonesty or unethical conduct);
- a person disqualified under sections 279, 280 or 284; and
- a corporation, other than its representative appointed to the board for a given term.
Insolvent persons
Under section 279, an insolvent person who acts as a director, or takes part in or is concerned in the management of a company, directly or indirectly, commits an offence. The penalty is a fine the court considers fit, or imprisonment for at least six months but not more than two years, or both. For this section, company includes an unregistered company.
Court orders against fraudulent persons
Section 280 lets the court bar a person from being a director or being concerned in management. The court must make the order where a person is convicted by a High Court of an offence connected with the promotion, formation or management of a company. It must also make the order where, in a winding up, a person appears to be guilty of an offence under sections 668 to 670, or of an offence involving fraud, whether or not convicted.
- The bar lasts for a specified period of no more than 10 years.
- The period starts after the sentence has been served or the fine paid.
- Anyone applying to the winding-up court must give the other person at least 10 days’ notice.
- The official receiver, the liquidator, or a past or present member or creditor can apply.
- Acting against the order is an offence punishable by a fine, or by imprisonment, or both.
Directors for life, and directors aged 70 or more
A person may be appointed a director for life, but can still be removed under section 288 (section 281). A person may be appointed a director of a public company even if he is 70 or older, but the resolution needs special notice and the notice must state the person’s age (section 282).
Questions and answers
Can a person under 18 be a director?
No. Section 283(a) disqualifies an infant, meaning a person under 18.
How long can a court bar someone from being a director?
For a specified period of up to 10 years, starting after the sentence is served or the fine paid (section 280(1) and (2)).
Who can apply for a disqualification order in a winding up?
The official receiver, the liquidator, or a person who is or has been a member or creditor of the company (section 280(5)).
Can a company be a director?
Not as such. Section 283(e) disqualifies a corporation, other than its representative appointed to the board for a given term.
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