Analysis of Amendment In Appointment And Qualification of Directors Amendment Rules, 2022

Ministry of Corporate Affairs (MCA) vide its notification dated June 01, 2022, has notified Companies (Appointment and Qualification of Directors) Amendment Rules, 2022, and the said rules are applicable from immediate effect i.e. June 01, 2022.

The Amendments provides for the following:

1. “Provided further that in case the person seeking appointment is a national of a country which shares land border with India, necessary security clearance from the Ministry of Home Affairs, Government of India shall also be attached along with the consent.”;

2. “Provided that no application number shall be generated in case of the person applying for Director Identification Number is a national of a country which shares land border with India, unless necessary security clearance from the Ministry of Home Affairs, Government of India has been attached along with application for Director Identification Number.”.

3. in the Annexure, –

(A) in Form DIR-2, under the heading Declaration, the existing paragraph, shall be numbered as paragraph (i) thereof and after the paragraph (i) as so numbered, the following shall be inserted, namely:-

“(ii) I further declare that –

I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director:.

or

I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director and the same has been obtained and is attached. ”;

(B) in FORM NO. DIR-3, under the heading Verification, after serial number 3, the following serial number shall be inserted, namely:-

“3A. I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number;  

or

I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number and the same has been obtained and is attached. ;

IN LAYMEN LANGUAGE, AFTER INSERTION OF THIS CLAUSE:

Rule 8 of Companies (Appointment and Qualification of Directors) Rules, 2014 shall be read as under:

Every person who has been appointed as director to hold the office in the company is required to give declaration regarding the nationality of director.

Any proposed director, who shares the land border with India i.e. China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan, give its consent in the Form DIR 2 that, I am required to obtain the security clearance from the Ministry of Home Affairs, Government and attached the same in the Form”

OR

Any proposed director who does not shares the land border with India i.e. China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan, give its consent in the Form DIR 2 that, I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director;

The same rule is applies on Form DIR 3 also: If any person who is willing to acquire Director Identification Number (DIN) and which share the land borders of India, is necessary to obtain security clearance from the Ministry of Home Affairs, Government of India and attached the same along with application for Director Identification Number.”.

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