pri Rules of online self assessment proficiency test for Independent Director New Rules of online self assessment proficiency test for Independent Director

Notification of MCA Dated October 22,2019 regarding Appointment & Qualification of Independent Directors.

A person who wishes to become Independent Director or acting already as an independent director required to cling certain norms & the provisions related to it are as under:

The New rules introduces amendments to Companies (Appointment and Qualification of Directors) Rules,2014,Companies(Accounts)Rules, 2014 and introduction of Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019. 

Amendment to Companies (Appointment and Qualification of Directors) Rules, 2014

 i) Every individual

directorwho has been appointed as an Independent Director in a Company shall within a period of 3 (three) months from the commencement of the said Rules, or who intends to get appointed as an Independent Director in a company after 01/12/2019 shall before such appointment, apply with such fees, as may be prescribed, to the ‘Indian Institute of Corporate Affairs (IICA) for inclusion of his name in the data bank for a period of 1 (one) year or 5 (five) years or for his lifetime as the case may be,

ii) Every person whose name has been included in the data bank shall make an application for renewal within 30 days of the expiry of the above period of 1 year, 5 years or lifetime as the case may be, else the name of individual shall stands removed from the data bank provided that Person who has paid lifetime fees for inclusion of his name in the data bank, need not submit application for renewal.

iii) Every Independent Director is required to submit declaration of above Compliance along with declaration u/s 149(7) every time to the Board.

iv) Every individual qualified in data bank of IICA shall also pass an online proficiency self-assessment test conducted by the institute within a period of one 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. However there is no limit on number of attempt an individual may take to pass this online test within one year. 

Exemption to the provision-

An Individual who has served for not less than 10 years as a Director or KMP in a Listed Public company or unlisted private company having Paid up share capital of Rs. 10 Crore or more.

Amendment to Companies (Account) Rules,2014

The changes presented in these rules mainly concern the issue that should be included in the Board of Directors’ report, which is now a statement regarding the Board’s opinion regarding the integrity, expertise and experience (including skill) of the independent directors appointed during the year. An important point to note here is that the skills of independent directors are quantified in terms of their online test performance.

Companies (Creation and Maintenance of data bank of Independent Directors Rules, 2019

These Rules deals with IICA to maintain a data bank of individuals who are eligible to serve as independent Directors and also conduct an online self-assessment test.

Online Test for Independent Directors-

Minimum Required Marks 60% to pass online self assessment proficiency test for an individual to act as an Independent Director.


These new provisions will help to curb fake appointments in certain companies following unethical practices and shall allow to follow practices of appointing person as an independent director who actually deserves for the appointment by clearing online self assessment tests.

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