Compliances Required by a Person Eligible And Willing to be Appointed as an Independent Director

1. APPLICABILITY:

1. Every individual

-existing Independent Directors (ID) shall within a period of three months from commencement of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 and

-every individual who intends to get appointed as an ID after such commencement shall,

-apply online to the Indian Institute of Corporate Affairs (“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 till he continues to hold the office of an independent director in any company.

2. Every individual whose name has been included in the data bank shall file an application for renewal for a period of 1 year, 5 years or for his life time, within 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.

3. Every independent director shall submit a declaration of compliance of sub-rule (1) and sub-rule (2) of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 to the Board, each time he submits the declaration required under sub-section (7) of section 149 of the Act.

4. 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 1 year 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.

5. Passing of the online proficiency self-assessment test is not applicable to an individual who has served for a period of not less than ten years as on the date of inclusion of his name in the databank as director or key managerial personnel in a listed public company or in an unlisted public company having a paid-up share capital of Rs. 10 crores.

ID registration procedure:

1. Login to mca.gov.in

2. Under MCA services, select individual / corporate registration from ID databank registration.

3. Enter DIN (In case the ID does not possess DIN, enter PAN. If the ID does not hold PAN, enter his passport number)

4. Send OTP

5. Once OTP is entered, ID and password will be sent to the mobile number

6. Go to independent directors data bank.in and login with the id and password received in the mobile number.

7. Fill up all the mandatory details and click on submit

8. Pay the prescribed fees

Proficiency Self-Assessment Test:

1. Every individual is required to an online proficiency self-assessment test within one year from inclusion of his name in the data bank.

2. an individual who has obtained a score of not less than sixty percent in aggregate in the online proficiency self-assessment test shall be deemed to have passed such test.

3. individuals can make multiple attempts for self-assessment even after passing it with minimum score of 60%.

Important timeline:

Last date for registration by existing ID: 29^th February, 2020