October 23, 2019
Summary of notifications under the Companies Act, 2013 issued on 22/10/2019 which will come into effect from 01/12/2019 are listed below:
1. MCA notifies India Institute of Corporate Affairs (IICA) to maintain the data bank for the Independent Directors:
The Central Government has notified the IICA at Manesar (Haryana) to be an institute for creation and maintenance of data bank containing the names, address and qualifications of the persons eligible to be the Independent Directors.
2. The Companies (Creation and Maintenance of Databank of Independent Directors) Rules, 2019:
i. MCA notifies that the institute shall create and maintain an online databank of individuals eligible to be the Independent Directors, which shall be placed on the website of the Institute.
ii. The Institute shall be assigned the responsibility to conduct self-assessment tests and preparation of the study material.
iii. A panel of ten members nominated by the Central Government shall approve the outline for study material and courses prepared by the institute.
3. The Companies (Accounts) Amendment Rules, 2019:
MCA requires the Board Report to include a statement of Board’s opinion with respect to the integrity, expertise and experience (including proficiency, assessed through the online assessment test conducted by the Institute u/s 150 of the Act) of the Independent Directors, who were appointed during the year.
4. The Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019:
Rule 6 of the said Rules is substituted, which provides guidelines to be complied with by any person who is appointed/intends to get appointed as an Independent Director on or after 1st December 2019. The rule indicates the timelines within which the eligible candidates must get their names included in the data bank maintained by the Institute, proof of compliance, which shall be submitted to the Board of Directors u/s 149(7). Once the names are included, within a period of one year from such inclusion, the said persons should obtain a minimum of 60% in the online proficiency test conducted by the institute. Directors/KMPs who have served Boards for over 10 years are excluded from taking this test.