Independent Director in relation to a company, means director mentioned under Section 149(6) of Companies act, 2013.

Since past many years, it has been seen that, when any of listed or unlisted entities are on the verge of danger or are getting effected due to some or other reasons and the directors of that respective entities resign from their designations because they are not able to cope up with those circumstances. Independent directors have to play very pivotal role in an organisation, so it is necessary that they should have high level of skill and knowledge to ensure better Corporate Governance and that the Company is fully compliant.

For this purpose, the Ministry of Corporate Affairs (MCA) has issued following compliances required to be followed by a person eligible and willing to be appointed as an Independent Director with the commencement of Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 (Rule 6 effective 01.12.2019)

  • Inclusion of Name in the Data Bank of Indian Institute of Corporate Affairs (IICA) at Manesar & Online Proficiency self-assessment Test

1. Every existing Independent Director

  • Shall apply within 3 months from commencement of this Rule (i.e. 01/12/2019)
  • ID should apply to institute for inclusion of his name before 29.02.2020
  • After inclusion of his name to Data Bank, shall pass online test (Score of 60% in aggregate) within 1 year from date of inclusion of his name (i.e last date of test will be 28.02.2021)

Proviso: An Individual who has served for not less than 10 years, as on the date of inclusion of his name in the Data Bank, as Director or Key Managerial Personnel (KMP) in a listed public Company or in unlisted public company having paid up share capital of Rs. 10 crore or more, shall not be required to pass the Test.

Human resources and self-development. Modern business -

Few Examples:

Ascertaining the eligibility of Independent Directors of XYZ Ltd for claiming exemption from online self –assessment proficiency Test of IICA:

Sr. No Name of Director Experience Whether ID’s will be exempted from passing online Test
1. Mr. A Director of X Ltd (Listed Co.)

( from 01/06/2002 to 31/10/2019)

More than 17 years

Yes. Exempted

2. Mr. B 1. Director of Y Ltd  (Public Ltd Co. having paid up share capital of 100 crore (from 04/06/2008 to 3/06/2009)

2. Director of Z Ltd (Public co. having paid up of 50 crore) (from 20/06/2009 to 19/06/2014 )

3. Director of P Ltd (Listed) ( from 01/06/2015 till 30/11/2019)

1 year

5 year

4 years and 6 months More than 10 years approx

Yes. He will be Exempted

3. Mrs. C Director in LMN Ltd (Listed) ( From 01/04/2014 till present) No. Not Exempted

2. Every individual who intends to get appointed as an Independent Director in a company:

  • 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).

IICA has fixed Rs 5000 (along with 18 % GST) for One Year subscription.

Fees plan for Five years and Lifetime are not yet been notified.


Every individual whose name has been so included in the data bank shall file an application for renewal for a further period of one year or five years or for his life-time, within a period of 30 days from the date of expiry of the period upto which the name of the individual was applied for inclusion in the data bank, failing which, the name of such individual shall stand removed from the data bank of the institute

Proviso:  that no application for renewal shall be filed by an individual who has paid life-time fees for inclusion of his name in the data bank.


Along with the Declaration required under Section 149(7) of the Act, Independent Directors shall submit a declaration of compliance of sub rule(1) and sub-rule (2) under Rule 6 of Companies (Appointment  and Qualifications of Directors) Rules, 2014 to the Board.


  • For practice purpose, online Mock Tests are available on IICA website. Actual Test will be available from 01.03.2020.
  • Test will be covering Companies Act , Securities Law , Basic Accountancy etc
  • Data Bank website have various e-learning courses, which can be referred for study, however it is not mandatory to take e-learning courses

Important Dates:

 Particulars Dates
Commencement of Registration 01.12.2019
Last date of registration for Existing ID’s 29.02.2020
Commencement for Slot Booking of Test 02.12.2019
Commencement of Actual Test 01.03.2020

{Reference:  MCA Website // IICA Website}

Disclaimer: All the views expressed are my own and do not represent the opinions of any entity whatsoever with which I have been, am now or will be affiliated. These are general ideas and views and not the legal opinion.

Written by CS Navneet Bathla
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Qualification: CS
Company: Practicing Company Secretary
Location: Mumbai, Maharashtra, IN
Member Since: 11 Dec 2019 | Total Posts: 3

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