The
Ministry of Corporate Affairs (MCA) has introduced new set of rules viz.The Companies
(Creation and Maintenance of Databank of Independent Directors) Rules, 2019 for
the existing Independent Director (ID) as well as for the persons who intends
to get appointed as the ID. Further, MCA has also amended others rules viz., the
Companies (Accounts) Amendments Rules and the Companies (Appointment and
Qualification of Directors) Rules to give the effect of the aforesaid new
rules.
Also,
MCA has notified that the Indian Institute of Corporate Affairs at Manesar,
Haryana (hereinafter referred as Institute) as an institute to create and
maintain databank for IDs.
The Key highlights of the amendments are as
follows
- Compliances on the part of existing Independent Director (ID) as well as for the persons who intends to get appointed as the ID:
- Existing ID shall within 3 months from 1 December, 2019 (i.e. 29 February, 2020) apply online to institute for inclusion of their name in data bank and renew as applicable
- Individual who intends to get appointed as ID (irrespective of having DIN or not) before such appointment is required to apply online to institute for inclusion of name in data bank renew as applicable
- Every ID is required to submit declaration that his/her name is included in databank and renewed as applicable alongwith the declaration required to be given u/s 149(7) of the Companies Act.
- Every individual whose name is included in databank is required to pass (obtained score of not less than 60% in aggregate in test) online proficiency self-assessment test within one year from the date of inclusion of his name in data bank, failing which his name shall stand removed from the databank of the institute.
- Exemption is given from online proficiency test to individuals who have served for a period of 10 years or more as director or KMP in Listed public company or in an unlisted public Company having paid up share capital of Rs. 10 crore or more. (For calculating experience – individual who is acting as a director or KMP in 2 or more companies at the same time shall be counted only once)
- In case of any changes in particulars of individual in data bank, the changes can be made through web based framework of institute within 30 days of such change.
- Additional Information to be disclose in Board Report:
- A statement regarding opinion of the board with regard to integrity, expertise and experience (including the proficiency) of the ID appointed during the year is required to be provided in the Board Report.
- In this case “Proficiency” means the proficiency of the independent director as ascertained from the online proficiency self-assessment test conducted by the institute notified under sub-section (1) of Section 150
- Duties of Institute:
- An institute is required to create and maintain online databank for persons who are eligible and willing to act as independent director
- Information available in the data bank shall be provided to the companies which are required to appoint ID on payment of fees
- Prepare a basic study material, online lessons, including audio visual for easy reference of individuals taking online proficiency self-assessment test by charging reasonable fees
- Conduct an online proficiency self-assessment test and advance tests covering companies law, securities law, basic accountancy and such other areas relevant to the functioning of an individual acting as an independent director by charging reasonable fees
- Share on daily basis with Central Govt. cumulative list of all individuals included/removed from data bank or list of individuals whose application have been rejected with reason
- Charge reasonable fee with prior approval of Central Govt, to be charged for inclusion of name in data bank and providing information on independent directors to company.
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