Analysis of Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2022

Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2022

Applicability: Independent Directors

Effective Date: 10th June, 2022

Summary of the Notification:

The MCA has inserted sub-rule (5) in Rule 6, after sub-rule (4) of the Companies (Appointment and Qualification of Directors) Rules, 2014:

Rule 6:- Compliances required by a person eligible and willing to be appointed as an independent director:

Rule 6(4) states that every individual whose name is so included in the data bank shall pass an online proficiency self-assessment test conducted by the institute within a period of 2 years from the date of inclusion of his name in the data bank, failing which, his name shall stand removed from the databank of the institute.

Until now, if the name was removed under sub-rule (4), the individuals whose names were so removed were required to apply afresh under sub-rule (1), however, vide this notification, an opportunity is provided to such individuals to restore their names upon payment of fees of ₹1,000/- subject to the following conditions:

i. name shall be shown in a separate restored category for a period of 1 year from the date of restoration;

ii. such individual shall be required to pass the online proficiency self-assessment test within a period of 1 year from the date of restoration;

iii. name shall be included in the databank, only, if the individual passes the said online proficiency self-assessment test;

iv. upon passing the test, the fees paid by the individual at the time of initial registration shall continue to be valid for the period for which the same was initially paid;

v. in case the individual fails to pass the online proficiency self-assessment test within 1 year from the date of restoration, his name shall be removed from the data bank;

vi. upon failing the online proficiency self-assessment test, the individual shall be required to apply afresh under sub-rule (1) for inclusion of his name in the databank.

Link of Notification:

Companies (Appointment and Qualification of Directors) Second Amendment, Rules, 2022