In this editorial, author shall discuss the latest amendment made by Ministry of Corporate Affairs (MCA) on June 01, 2022.
♦ MCA has amended Companies (Appointment and Qualification of Directors) Rules, 2014.
♦ Three amendments have been made:
i. Amendment has been made in Rule 8 by addition of a Proviso.
ii. Amendment has been made in Rule 10 by addition of a Proviso.
iii. Amendment has been made in DIR-2 and DIR-3.
A. Amendment I:
I. Rule 8 – Consent to Act as Director
Language of Law: 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 Consent (DIR-2).
II. List of Countries sharing Land border with India:
China, Pakistan, Bhutan, Myanmar, Afghanistan, Nepal and Bangladesh.
III. INTERPRETATION:
W.e.f. June 01, 2022 if any person want to appoint Director in India Company and belong to any of above mentioned countries then before appointment such person required to take approval from Ministry of Home Affairs.
B. Amendment I:
I. Rule 10 – Intimation of DIN to Company
Language of Law: In case the person apply for DIN is a national of a country which shares land border with India, necessary security clearance from the Ministry of Home Affairs, Government of India required to attached in form DIR-3 to get DIN..
II. INTERPRETATION:
W.e.f. June 01, 2022 if any person want to get Director identification No. (DIN) in India and belong to any of above mentioned countries then before to obtain DIN such person required to take approval from Ministry of Home Affairs and such clearance/ approval required to attach in DIR-3.
C. Amendment III:
I. Amendment in DIR-2
New Disclosure: New disclosure added in DIR-2
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.
II. Amendment in DIR-3:
New Disclosure: New disclosure added in DIR-3
Declaration 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.
III. INTERPRETATION:
W.e.f. June 01, 2022 if any person
- want to get Director identification No. (DIN) in India; or
- Want to appoint as Director in any Company Incorporated in India
belong to China, Pakistan, Bhutan, Myanmar, Afghanistan, Nepal and Bangladesh these countries then before to obtain DIN or before appointment such person required to take approval from Ministry of Home Affairs and such clearance/ approval required to attach in DIR-3 or along with DIR-2.
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).
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