PREVENTION OF MANAGEMENT BY UNDESIRABLE PERSONS
The Companies Act lays down special provisions for preventing the management of companies by certain undesirable persons. Sections 202 and 203 of the Act specifically provide that these persons cannot manage a company or take part in its promotion or formation: An undischarged insolvent cannot (i) act as, or discharge any of the function of, a director or manager of any company or (ii) directly or indirectly take part or be concerned in the promotion, formation or management of a company.
If the undischarged insolvent discharges any of the aforesaid function, he shall be punishable with imprisonment for a term which may extend to 2 years, or with fine which may extend to INR 5,000, or both.
The ...
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