Section 378Q Vacation of office by directors – Companies Act 2013

Section 378Q of Companies Act 2013 amended by Companies (Amendment) Act, 2020. Provisions and rules for Vacation of office by directors.

Amended and updated notes on section 378Q of the Companies Act 2013 as amended by the Companies (Amendment) Act, 2020 and Company Rules made there under. Detail discussion on provisions and rules related to Vacation of office by directors.

Chapter XXIA PART-III (Sections 378O to 378Z) of the Companies Act 2013 (CA 2013) deals with the provisions related to management of producer company. Section 378Q of CA 2013 provides for Vacation of office by directors.

Recently, we have discussed in detail section 378P (Appointment of directors) of CA 2013. Today, we learn the provisions of section 378Q of the Companies Act 2013.

In exercise of the powers conferred by sub-section (2) of section 1 of the Companies (Amendment) Act, 2020 (29 of 2020), the Central Government appoints the 11th February, 2021 as the date on which the provisions of section 52 of the Companies (Amendment) Act, 2020 shall come into force.

Accordingly, the provisions of section 378Q are effective from 11th February, 2021. You may refer Notification No. S.O. 644(E) dated 11-02-2021. In this article, you will learn detail of the provisions of section 378Q the Companies Act 2013.

Name of ActThe Companies Act 2013
Enacted byParliament of India
Administered byMinistry of Corporate Affairs (MCA)
Number of Chapters29
Number of Sections484 (470-43+57)
Number of Schedules7
You are reading:
Chapter No.XXIA (PART-III)
Chapter NameManagement of Producer Company
Section No.378Q
Section NameVacation of office by directors
Monthly Updated EditionCompany Law PDF

Section 378Q: Vacation of office by directors

Section 378Q(1) of Companies Act

The office of the director of a Producer Company shall become vacant if,—

  • (a) he is convicted by a court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months;
  • (b) the Producer Company, in which he is a director, has made a default in repayment of any advances or loans taken from any company or institution or any other person and such default continues for ninety days;
  • (c) he has made a default in repayment of any advances or loans taken from the Producer Company in which he is a director;
  • (d) the Producer Company, in which he is a director—
    • (i) has not filed the annual accounts and annual return for any continuous three financial years; or
    • (ii) has failed to, repay its deposit or withheld price or patronage bonus or interest thereon on due date, or pay dividend and such failure continues for one year or more;
  • (e) default is made in holding election for the office of director, in the Producer Company in which he is a director, in accordance with the provisions of this Act and articles;
  • (f) the annual general meeting or extraordinary general meeting of the Producer Company, in which he is a director, is not called in accordance with the provisions of this Act except due to natural calamity or such other reason.

Section 378Q(2) of Companies Act

The provisions of sub-section (1) shall, as far as may be, apply to the director of a Producer Institution which is a member of a Producer Company.


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