Companies Act, 1956
Sec 266 - Restrictions on appointment or advertisement of director.
(1) A person shall not be capable of being appointed director of a company by the articles, and shall not be named as a director or proposed director of a company in a prospectus issued by or on behalf of the company, or as proposed director of an intended company in a prospectus issued in relation to that intended company, or in a statement in lieu of prospectus filed with the Registrar by or on behalf of a company, unless, before the registration of the articles, the publication of the prospectus, or the filing of the statement in lieu of prospectus, as the case may be, he has, by himself or by his agent authorized in writing,
(a) signed and filed with the Registrar a consent in writing to act as such director ; and
(i) signed the memorandum for shares not being less in number or value than that of his qualification shares, if any ; or
(ii) taken his qualification shares, if any, from the company and paid or agreed to pay for them ; or
(iii) signed and filed with the Registrar an undertaking in writing to take from the company his qualification shares, if any, and pay for them ; or
(iv) made and filed with the Registrar an affidavit to the effect that shares, not being less in number or value than that of his qualification shares, if any, are registered in his name.
(2) Where a person has signed and filed as aforesaid an undertaking to take and pay of his qualification shares, he shall, as regards those shares, be in the same position as if he had signed the memorandum for shares of that number or value.
(3) References in this section to the share qualification of a director or proposed director shall be construed as including only a share qualification required within a period determined by reference to the time of appointment, and references therein to qualification shares shall be construed accordingly.
(5) This section shall not apply to
(a) a company not having a share capital;
(b) a private company;
(c) a company which was a private company before becoming a public company; or
(d) a prospectus issued by or on behalf of a company after the expiry of one year from the date on which the company was entitled to commence business.