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CS Pooja (Company Secretary)     26 May 2009

Can a minor be a Director

Dear All

The eligibility criteroin of a Director doesnt bar a minor to be a Director..so can a minor be a Director...we know the answer but what is the justification for the same...


 36 Replies

CS Pooja (Company Secretary)     26 May 2009

274. Disqualifications of directors

(1) A person shall not be capable of being appointed director of a company, if-

(a) he has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;

(b) he is an undischarged insolvent;

(c) he has applied to be adjudicated as an insolvent and his application is pending;

(d) he has been convicted by a Court 1[***] of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less to six months, and a period of five years has not elapsed from the date of expiry of the sentence;

(e) he has not paid any call in respect of shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call; or

(f) an order disqualifying him for appointment as director has been passed by a Court in pursuance of section 203 and is in force, unless the leave of the Court has been obtained for his appointment in pursuance of that section.

2[(g) such person is already a director of a public company which,-

(A) has not filed the annual accounts and annual returns for any continuous three financial years commencing on and after the first date of April, 1999; or

(B) has failed to repay its deposit or interest thereon on due date or redeem its debentures on done date or pay dividend and such failure continues for one year or more :

Provided that such person shall not be eligible to be appointed as a director of any other public company for a period of five years from the date on which such public company, in which he is a director, failed to file annual accounts and annual returns under sub-clause (a) or has failed to repay its deposit or interest or redeem its debentures on due date or pay dividend referred to in clause (b).]

(2) The Central Government may, by notification in the Official Gazette, remove-

(a) the disqualification incurred by any person in virtue of clause (d) of sub section (1), either generally or in relation to any company or companies specified in the notification; or

(b) the disqualification incurred by any person in virtue of clause (e) of subsection (1).

(3) A private company which is not a subsidiary of a public company may, by its articles, provide that a Person shall be disqualified for appointment as a director on any grounds in addition to those specified in subsection (1).

Swami Sadashiva Brahmendra Sar (Nil)     26 May 2009

These are disqualifications. what are qualifications?

kartikeya (lawyer/cyber law consultant/cyber crime investigator)     26 May 2009

No, Minor cannot be a director . When any person is appointed as director not only Companies Act but other Laws and Act also must be considered.minor can not make a contract. This is the reason why any other company also cannot be made direcor as in Eye of Law it is a person still it is not a "natural Person " or say Human being.

Swami Sadashiva Brahmendra Sar (Nil)     26 May 2009

absulutely right mr kartik !

but when a thing is not barred, it is to be held legal. thats why i have asked the positive provision about qualifications.

Rajendran Nallusamy (Advocate)     27 May 2009

 No age restrictions are mentioned in Companies Act (except for MD in Schedule XIII) for Directors. However as per Indian Contract Act, A minor cannot enter contract. He can not make contracts.

CS Pooja (Company Secretary)     27 May 2009

Thanks all, for your expert opinions.

But at the same time, as a matter of fact, the same is not barred by the Companies Act, 1956.

When a person is appointed as a Director, how will that be considered that he has entered into a contract, as he doesnt sign any.

Also, at the time of appointment, what all is required is the consent from the person to act as a Director and a declaration that he is not disqualified u/s 274 along with his disclosures under Section 299...which nowhere mention his attaining majority.

Hence, my question is can it be concluded that even if he is minor and to be appointed as a director, the law is not questioning the issue of majority....????

Hemant Agarwal (ha21@rediffmail.com Mumbai : 9820174108)     27 May 2009

The  Companies Act does not supercede the Contract Act.

Contract Act, provides the provisions to be followed, to contract legal obligations.  A minor cannot "consent" or "declare" for ANY legal obligations, not even under the companies Act.  Going by this logic, the companies act bars a person who cannot  "consent"  and/or  "declare" and the Contract Act prohibits so.

Keep Smiling .... Hemant Agarwal


Swami Sadashiva Brahmendra Sar (Nil)     27 May 2009

Good logic ! but  mr rajendran says, "No age restrictions are mentioned in Companies Act (except for MD in Schedule XIII) for Directors" . then does 'nt it makes diference between MD and other directors ?

further, 1. a minor can be beneficiary of a contract and 2. contract can be entered into on his behalf by some other person .

CS Pooja (Company Secretary)     27 May 2009


Just to add:
 While declarations by a director u/s 299, if a director fails to give the disclosures, he is punishable (but the appointment is not invalid) and liable for the vacation of the office.
Also, pl note that a valid consent of a Director is required u/s 264.
But the same is not applicable to a private Co.
Hence, a minor can be a director in a pvt. Co.
I know it is a hypothetical issue ...as in practical sense, the co. will be crippled in many sense with minor as a director, but I just wanted to throw a light on the loophole.
Pooja Shukla

Swami Sadashiva Brahmendra Sar (Nil)     27 May 2009

You have raised a good topic . tne gap must be filled up. otherwise the general rule that "when an act is not prohibited, it is presumed to have been permitted" will always put a strong plea for the view that A MINOR CAN BE A DIRECTOR.

Hemant Agarwal (ha21@rediffmail.com Mumbai : 9820174108)     27 May 2009

1.  A minor is not capable of "Contracting"  or  "Consenting"  or  "Declaring", on any issues under any Act.  The Contract Act says so and the provision of the Contract Act supercedes all other acts, as far as Contracting or say commercial "Legal obligations" go by.

2.  A  Minor cannot be any beneficiary,  under any Act.  His guardian or the State is guardian beneficiary, in the sense that the minor cannot benefit directly, apart from receiving the maintainence benefits.  The guardian comes under the Taxation laws and not the Minor, as far as receipts of benefits are concerned.

3.  A Contract on behalf of a  Minor is  null and void, since the minor cannot be prosecuted and the  "behalf person"  necessarily acts on the Master's (minor's) instructions and also cannot be prosecuted.  (hypothetically atleast)

4.  A minor if made a director in a Pvt. Ltd. Co., would be null & void, in case there are only two directors in a Pvt.Ltd.Co.  It would mean that the minimum director ratio would still be only one, since Minor cannot contract   AND further, there are no provisions of  "PROXY"  directors in a company (public or pvt).
A Act may not be prohibited under the Companies Act,  but there are other Laws / Acts that prohibits so or lays down contra provisions for the same.  Such other laws/acts have to be "READ WITH" the companies act to arrive at a legal finality.

A crime or violations done under the Housing Societies Act or the Local muncipal Act does not have provisions for  "punishment" or "imprisonment",  BUT the IPC has and the CrPC has procedural provisions,  to prosecute the  criminal / violator under the IPC and not under the principle acts.

5.  Like several other things which are not mentioned in the Companies Act, The Age of the Directors have to be under the countries other laws, namely the Contract Act.
Similarly the Companies Act does not mention anything about Sales Tax, Excise and Service Tax etc....  BUT the "Sales Tax" laws have to be applied & followed, on the Goods Production done by the Company which is registered under the Companies Act.
Similary the Excise Laws, the Service Tax and other host of Laws, have to be interpreted and intervened by the Company which is registered under the Companies Act.

6.  Going by the logic of Minor being capable of being  or made a Director (public or Pvt co.'s),  our parliament can also have minor  MP's  run by proxies or guardians of the minor. 
WHAT SAY, about this rational logic, apart from being a hypothetical issue.

7.  TO take this "hypothetical issue", a bit further :
a)  The Banking Act, could be changed to grant loans directly to Minor's,  since the Act does not say anything about the Age factor for granting loans. (No recovery possible from Minor, under any law)
b)  The Arms Act, too could be changed to grant Arms licenses to a Minor, since the Act does not say anyting about the Age factor for granting Arms licenses.  (cannot be punished)
c)  Same applies for Industrial Act and a host of other Acts.  (cannot be prosecuted)

Happy Interpreting the LAW.
As it is, my uncle always says that the LAW is a ASS.

Keep Smiling .... Hemant Agarwal

Swami Sadashiva Brahmendra Sar (Nil)     27 May 2009

Mr Hemant is right to some extent

CS Pooja (Company Secretary)     28 May 2009

Thanks u, Mr. Hemant for your detailed reply..
But, as a law student, I still have a doubt that I hope that a learnt person like you can clear.

Can a minor not "declare" anything??
For example, when we fill our SSC exam form...we declare the details about us..and sign the same ..will that not amount to declaration by a minor??
Or, in case of a witness in a crucial case.. can a minor not give his statement..
May I request you to pl guide me...

Divya Paras (Corporate Lawyer)     29 May 2009


A minor cannot be appointed nor can consent to become a Director of a company. Let us be guided by the core law that is the Indian Contract Act, 1872 in this regard.
The Indian Contract Act excludes and renders a minor as incompetent to contract. What the above sentence implies is that a minor cannot bind himself under a contract or a declaration in that matter as the Law holds a contract with a minor as void and unenforceable against him.
It is also to be noted that once a person is inducted on the Board of a company as a Director he is responsible collectively with the other Board of Directors to regulate the affairs of the company. A Director is also liable to penalty in cases of any fraud or misrepresentation to his account with respect to the affairs of the company. A Director is responsible to the Company for his acts in relation to the conduct of affairs of the company.
A Director has to file consent with the ROC to act as a Director of the company. This implies that the Director is binding himself to act on behalf of the company. I fail to understand how a minor who is incompetent to contract and bind himself can act in a fiduciary capacity to bind a company for the performance of a contract and otherwise.
Be guided by the case law Mohori Bibee vs Dharmodas in which the Court has provided that a minor has no legal competency to enter into a contract. Also that any contract entered into by a minor is void and not merely voidable, as he is not competent to contract.
And as regard to any witness statement given by a minor during a trial is a mere statement as of the incidence or knowledge as relating to a particular incident or aspect as the case may be. Here the minor is nor entering into any contract nor giving an undertaking of his statement to be true. And any false statement is not enforceable against him. 

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