The Ministry of Corporate Affairs (MCA) vide its notification dated 19th August, 2021 has amended the rules pertaining to appointment and qualification of Directors. Pursuant to the notification, following class of individuals are no more required to qualify the online proficiency self-assessment tests to be Independent Director:
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An individual who are or have been for at least 10 year an advocate in Court, Chartered Accountant in practice, Cost accountant in practice and Company Secretary in practice.
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An individual in the pay scale of director or equivalent or above in any ministry or department of the Central government or any state government, and having experience in handling following and have served a period of 3 years:
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the matters relating to commerce, corporate affairs, finance, industry or public enterprises; or
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the affairs related to Government companies or statutory corporations set up under an Act of Parliament or any State Act and carrying on commercial activities. Previously the exemption no. 2 above was restricted to certain ministries only.
It is a welcome move wherein certain experienced professionals and government officials have been exempted from the pre-requisite requirement of online test to be eligible for being Independent Director.
PDF version is attached: https://www.dpncindia.com/blog/wp-content/uploads/2021/08/Note-on-relaxation-to-Independent-Director.pdf
For more details, please refer to the MCA notification:https://www.cbic.gov.in/resources//htdocs-cbec/gst/157-13-2021%20GST%20Circular.pdf
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The information contained herein is in summary form based on the notification dated 19th August, 2021 by Ministry of Corporate Affairs on the Companies (Appointment and Qualification of Directors) Amendment Rules, 2021. While the information is believed to be accurate to the best of our knowledge, we do not make any representations or warranties, express or implied, as to the accuracy or completeness of this information. Reader should conduct and rely upon their own examination and analysis and are advised to seek their own professional advice. This document is not an offer, invitation, advice or solicitation of any kind. We accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies upon it.