{"id":29521,"date":"2020-03-10T11:31:15","date_gmt":"2020-03-10T06:01:15","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=29521"},"modified":"2020-08-24T12:20:17","modified_gmt":"2020-08-24T06:50:17","slug":"mca-notifies-company-amendment-rules-2020-for-independent-director","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/mca-notifies-company-amendment-rules-2020-for-independent-director\/","title":{"rendered":"MCA notifies for Appointment and Qualification of Independent Directors: Amendment Rules 2020"},"content":{"rendered":"<p class=\"has-drop-cap\">The <strong>Ministry of Corporate Affairs (MCA<sup><a href=\"https:\/\/www.mca.gov.in\/\">[1]<\/a><\/sup>)<\/strong>, has brought a new notification regarding the appointment and qualification of <a href=\"https:\/\/enterslice.com\/learning\/role-of-an-independent-director\/\"><strong>independent directors<\/strong><\/a>. It is notified that the Companies (Appointment and Qualification of Directors) Rules, 2014, have been now amended. These rules will be known as the <strong><em>Companies (Appointment and Qualification of Directors) <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Amendment&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;An &amp;quot;amendment&amp;quot; refers to the formal change or correction of a legal document, often involving additions, variations, or deletions to address irregularities or clarify points in an agreement.(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/amendment\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Amendment<\/a> Rules, 2020,<\/em><\/strong> which will come into force as on the date of their publication in the official gazette. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Amendment Rules, 2020 &ndash; Changes in conditions for databank of independent\ndirectors<\/h3>\n\n\n\n<p>The amendments are regarding <strong>Rule 6<\/strong>, which is related to &ldquo;Creation and maintenance of databank\nof persons offering to become independent directors&rdquo;. In the exercise of the powers\nprovided by <strong><em>section 149<\/em><\/strong> read along with <strong><em>section 469<\/em><\/strong> of the\nCompanies Act, 2013, the Central government has made the rules as follows:<\/p>\n\n\n\n<ul><li><strong><em>In sub-rule (1) substitution of word five months instead of three months<\/em><\/strong>&ndash; The individual who is <a href=\"https:\/\/enterslice.com\/learning\/know-about-the-appointment-of-independent-director\/\"><strong>appoint independent director<\/strong><\/a> is required, to apply online to institute for inclusion of his name in the databank, <strong><em>within a period of five months<\/em><\/strong> for the duration of either for 1 year or 5 years or for his lifetime. These steps will be taken from time to time till the director continues to hold the office of an independent director in any company.<\/li><li><strong><em>In sub-rule (4) first proviso<\/em><\/strong>&ndash; The individual who has the name in the data bank needs to pass the online proficiency self-assessment test within a period of one year from the date of inclusion of director&rsquo;s name. But the individual shall not have to pass the online proficiency self-assessment test if he has served as the director or the key managerial personnel for the total period of not less than 10 years or who falls under any of the one or more of the following:<\/li><li>In any listed public company<\/li><li>Any unlisted company which has the minimum paid-up capital of <strong><em>Rs. 10 Crore<\/em><\/strong> or more,<\/li><li>Lastly,&nbsp; in any corporate body listed on a recognized stock exchange<\/li><li><strong><em>In sub-rule (4) second proviso<\/em><\/strong>&ndash; The word <em>&lsquo;companies&rsquo; <\/em>is substituted with the words <strong><em>&ldquo;companies or bodies corporate&rdquo;.<\/em><\/strong><\/li><\/ul>\n\n\n\n<div class=\"shadow4\"><strong>NOTE:<\/strong> The Principal Rules were published with the notification number G.S.R 259(E) as on 31st March 2014, and the last amended notification was published with the number G.S.R 804(E) as on 22nd Oct 2019.<\/div>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/form-aoc-4-cfs-companies-accounts-amendment-rules-2020\/\" target=\"_blank\" rel=\"noopener noreferrer\">Companies (Accounts) Amendment Rules 2020- Filing of Financial Statements by NBFCs<\/a><\/mark>.<\/p><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Amendment Rules 2019<\/h2>\n\n\n\n<p>In the exercise of the powers provided by <strong><em>Section\n149<\/em><\/strong> read along with <strong><em>Section 469<\/em><\/strong> of the Companies Act,\n2013, the Central government has made the rules.<\/p>\n\n\n\n<p>&nbsp;The amendments are\nregarding <strong>Rule 6<\/strong>, which is related\nto &ldquo;Creation and maintenance of databank of persons offering to become\nindependent directors&rdquo; which is known as <strong><em>Companies (Appointment and Qualification of\nDirectors) Amendment Rules, 2019. <\/em><\/strong>It came into effect since 1<sup>st<\/sup>\nDecember 2019. <\/p>\n\n\n\n<p>In <strong>Rule 6<\/strong>, the following rules were with reference to Rules 2019:<\/p>\n\n\n\n<ul><li>The following compliances are required by the eligible and willing person who has to be appointed as an independent director. These include:<\/li><li>The individual <strong><em>who intends <\/em><\/strong>to get appointed as a director after the commencement of the company<\/li><li>The individual <strong><em>who has been appointed<\/em><\/strong> as a director in the company <\/li><\/ul>\n\n\n\n<p>Such person shall apply online to institute for the inclusion of his name in the databank, <strong><em>within a period of three months<\/em><\/strong> from such commencement of the company for a period of either for 1 year or 5 years or for his lifetime. These steps will be taken from time to time until the director continues to hold the office of an independent director in a company as specified under <em>sub-rule (2).<\/em> <\/p>\n\n\n\n<ul><li><strong>Proviso- <\/strong>If the individual\nis not having a DIN number, he may also voluntarily be able to apply to\ninstitute for inclusion of his name in the databank. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>The appointment and qualification of directors is essentially required for any of the company. The directors have the key role in the company as they act on behalf of the <a href=\"https:\/\/enterslice.com\/company-registration\"><strong>private company<\/strong><\/a>. Therefore, it is mandatorily required for the inclusion of the independent director of the company in the databank. The window was for three months in 2019 which is substituted with the five months in the amendment of 2020. Other major changes were that firstly, no director with the experience of more than 10 years is required to pass the online proficiency self-assessment test. Secondly, the word companies include the word bodies corporate from now as well.<\/p>\n\n\n<a href=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/rule_28022020.pdf\" class=\"pdfemb-viewer\" style=\"width: 767px; \" data-width=\"767\" data-height=\"max\" data-toolbar=\"bottom\" data-toolbar-fixed=\"on\">rule_28022020<br><\/a>\n<p class=\"wp-block-pdfemb-pdf-embedder-viewer\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Ministry of Corporate Affairs (MCA[1]), has brought a new notification regarding the appointment and qualification of independent directors. It is notified that the Companies (Appointment and Qualification of Directors) Rules, 2014, have been now amended. These rules will be known as the Companies (Appointment and Qualification of Directors) Amendment Rules, 2020, which will come [&hellip;]<\/p>\n","protected":false},"author":34,"featured_media":29522,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2611],"tags":[],"acf":{"service_id":"1"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>MCA notifies for Appointment and Qualification of Independent Directors<\/title>\n<meta name=\"description\" content=\"The Ministry of Corporate Affairs (MCA), has brought a new notification regarding the appointment and qualification of Independent Directors.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/mca-notifies-company-amendment-rules-2020-for-independent-director\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"MCA notifies for Appointment and Qualification of Independent Directors\" \/>\n<meta property=\"og:description\" content=\"The Ministry of Corporate Affairs (MCA), has brought a new notification regarding the appointment and qualification of Independent Directors.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/mca-notifies-company-amendment-rules-2020-for-independent-director\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-10T06:01:15+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-08-24T06:50:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/MCA-notifies-for-Appointment-and-Qualification-of-Independent-Directors-Amendment-Rules-2020.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"352\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Soumya Bajpai","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/02\/Soumya-Bajpai.jpg","authorDescription":"Soumya has done LLB (Hons) and has a 2+years experience in writing. Her main interest is in reading judgments, new enactments and amendments taking around in law. She always strives to bring the best to work that she does.","postViews":446,"readingTime":3,"nextPost":{"id":29531,"slug":"how-to-start-a-pharmacy-business-in-india"},"prevPost":{"id":29515,"slug":"epf-interest-rate-slashed-by-15bps-to-8-5-know-the-full-story"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/MCA-notifies-for-Appointment-and-Qualification-of-Independent-Directors-Amendment-Rules-2020.jpg","postTerms":"MCA Notification","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/29521"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=29521"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/29521\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/29522"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=29521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=29521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=29521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}