In a Gazette Notification dated 28th September, 2020, the Ministry of Corporate Affairs has amended the Companies (Appointment and Qualification of Directors) Rules, 2014 to further extend the period within which an individual eligible and willing to be appointed as an independent director must apply online to the institute for inclusion of their name in the data bank.
The Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2020 (“Amendment Rule”) has become effective since 28th September, 2020 i.e. from the date of its publication in the Official Gazette.
| 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 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.
(…) |
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 ten months thirteen 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 13 months of December 1, 2019, i.e. by December 31, 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 then to June 30, 2020 and further to September 30.
Now, the MCA has further extended the timeline for compliance to, 31st December, 2020.
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Source: Ministry of Corporate Affairs
