MAINTAINENCE OF DATA BASE OF INDEPENDENT DIRECTORS

COMPANIES (CREATION AND MAINTENTENANCE OF DATABANK IN INDEPENDENT DIRECTOR) RULE,2019

Section 150:

This is new section which provide the manner or selection of independent director and maintenance of databank by anybody, institute or association as may notified by cental government. This section also tells prescription power of cental government.

Notification from the Government of India’s Ministry of Corporate Affairs dated October 22, 2019 (G.S.R. 805) (E). By virtue of the authority granted by Sections 150 and 469 of the Companies Act of 2013 (18 of 2013), the Central Government hereby promulgates the following regulations:

shall take effect on December 1, 2019 and continue through December 31, 2020.

Establishing and maintaining a data bank.

(1) The institute must establish and maintain a database of candidates who are qualified and willing to serve as independent directors. This database must be accessible online and must be posted on the institute’s website.

(2) For each person listed in the data bank who is eligible and willing to be appointed as an independent director, the data bank referred to in sub-rule (1) shall include the following information:

(a) DIN (Director Identification Number), if applicable.

(b) Income tax PAN.

(C) Name and surname in full.

(d) The father’s name.

(e) Date of birth.

(f) Gender.

(g) Nationality.

(h) Occupation

(i) The full address with PAN (Present and Permanent).

(j) Email Address, Mobil number.

(k) The education and professional qualifications.

(l) Experience and expertise if any.

(m) the list of limited liability companies in which he is or was a director along with

(i) the name of the company.

(ii) the nature of the industry; and

(iii) the duration- with dates.

(n) the list of limited liability companies in which he is or was a designated partner along with.

(i) the name of the limited liability company.

(ii) the nature of the industry; and

(iii) the nature of the duration- with dates.

(3) After paying fair fees to the institute, corporations required to nominate independent directors will only be given access to the data bank’s information.

(4) A person whose name is in the data bank may limit the institute to whom the institute may reveal his personal information.

(5) Any person whose name appears in the data bank must update his information through a web-based framework made available by the institute for this purpose within thirty days of the modification.

(6) A disclaimer stating that a corporation must do its own due diligence before to appointing any individual as an independent director will be prominently published on the website housing the data bank.

(7) The institute, with the Central Government’s prior approval, shall set a reasonable fee to be charged from:

(a) individuals for inclusion of their names in the data bank of independent directors; and

(b) corporations for providing the information on independent directors available on the data bank.

Institutional responsibilities (1) The institute must follow the following procedures with regard to the people listed in sub-rule

(1) of rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014:

(a) conduct an online proficiency self-assessment test covering companies’ law, securities law, basic accountancy, and such other areas relevant to the function of an individual acting as an independent director.

(b) prepare a basic study material, online lessons, including Given that they will not impose any additional fees,

(2) Every day, the institute must provide the Central Government with a list of all people:

(a) whose names have been added to the data bank, along with the date of addition, their Income Tax PAN, or Passport number in the case of a foreign director (not required to have an Income-Tax PAN);

(b) whose applications for inclusion in the data bank have been rejected, along with reasons and the dates of such rejection; and

(c) whose names have been removed from the data bank.

PANAL

(1) The Central Government shall appoint a panel of not more than ten members for the purpose of approving the curriculum and study guides created by the institute.

(2) The panel mentioned in sub-rule (1) shall be made up of the following individuals:

(a) the Secretary, Ministry of Corporate Affairs, or his nominee.

(b) the Director General and Chief Executive Officer of the institute, or his nominee.

(c) one member proposed by the Department of Economic Affairs.

(d) one proposed by the Department of Public Enterprises.

(e) one proposed by the Securities and Exchange Board of India; and

(f) at least one stock exchange representative proposed by the Department of Economic Affairs.

(g) at least one person from business that the central government has nominated: and

( h) at least one academic that the central government has nominated.

To further amend the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019, the Ministry of Corporate Affairs (MCA) released the Companies (Creation and Maintenance of databank of Independent Directors) Amendment Rules, 2021 on June 21, 2021.
The Companies that are required to appoint independent directors pursuant to the Companies Act of 2013 as well as current independent directors and individuals who are willing to be nominated as Independent Directors shall be subject to the Rules.
It states that if a person delay submitting an application to IICA for name inclusion or renewal, IICA may nonetheless approve the inclusion or renewal “after collecting a further price of one thousand rupees.”

1.RULE………………2019 Companies (Creation and Maintenance of Independent Directors’ Databank) Rules, Rule 3(7)(a)

2.RULE………………Rule 3(8) of the 2019 Companies (Creation and Maintenance of Independent Directors’ Databank) Rules

PRE-AMENDMENT

(7) The institute must set a fair fee that will be deducted from: with the Central Government’s previous consent.

(a) Individuals to add their names to the independent directors’ database; and

POST AMENDMENT

(7) The institute must set a fair fee that will be deducted from: with the Central Government’s previous consent.

(a) Individuals for their names to be added to or renewed in the independent directors’ database; and

A NEW INSERT
The institute shall permit such inclusion or renewal, as the case may be, under rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, after charging an additional fee of one thousand rupees on account of the individual’s delay in applying to the institute under sub-rule (7) for inclusion of his name in the data bank or in case of delay in filing an application for renewal thereof.

REFERENCES

1.https://taxguru.in

2.The companies act ,2013

3.live.law

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