In a Gazette Notification dated 23rd June, 2020, the Ministry of Corporate Affairs (MCA) has extended the period by which existing independent directors must register themselves with its online databank of independent directors from June 30, 2020 till September 30, 2020.
The extension is brought in by the Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2020 (“Amendment Rules”) which is amending the Companies (Appointment and Qualification of Directors) Rules, 2014 (“Principal Rules”).
The Amendment Rules are effective since 23rd June, 2020 i.e. from the date of its publication in the Official Gazette.
A detailed analysis of the Amendment Rules is given in the table below:
| Principal Rules | Amendment Rules | Implications |
| Rule 6. Compliances required by a person eligible and willing to be appointed as an independent director:
(1) Every individual –
(a) who has been appointed as an independent director in a company, on the date of commencement of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, shall within a period of seven months from such commencement; or
(b) who intends to get appointed as an independent director in a company after such commencement, shall before such appointment, apply online to the institute for inclusion of his name in the data bank for a period of one year or five years or for his life-time, and from time to time take steps as specified in sub-rule (2), till he continues to hold the office of an independent director in any company: Provided that any individual, including an individual not having DIN, may voluntarily apply to the institute for inclusion of his name in the data bank.
(…) |
Rule 6. Compliances required by a person eligible and willing to be appointed as an independent director:
(1) Every individual –
(a) who has been appointed as an independent director in a company, on the date of commencement of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, shall within a period of seven months ten months from such commencement; or
(b) who intends to get appointed as an independent director in a company after such commencement, shall before such appointment, apply online to the institute for inclusion of his name in the data bank for a period of one year or five years or for his life-time, and from time to time take steps as specified in sub-rule (2), till he continues to hold the office of an independent director in any company: Provided that any individual, including an individual not having DIN, may voluntarily apply to the institute for inclusion of his name in the data bank.
(…) |
As per the Amendment Rules, every person appointed as an independent director must within 10 months of December 1, 2019, i.e. by September 30, 2020, make an application online to the institute for inclusion of his name in the data bank for a period of one year or five years or for his life-time.
Initially, at the time of introduction of requirement of registration in databank, the Rules specified that the application for inclusion of name in databank had to be done within 3 months of December 1, 2020.
The timeline was subsequently relaxed to April 30, 2020 and later again to June 30, 2020
Now, the MCA has further extended the timeline for compliance to September 30, 2020.
|
Source: Ministry of Corporate Affairs
