Section 150 of the Companies Act, 2013 provides that an independent director can be selected from a data bank maintained by any body, institute or association, as may by notified by the Central Government. The data bank would contain names, addresses and qualifications of persons who are eligible and willing to act as independent directors. The company needs to ensure exercise of due diligence before selecting an independent director from the data bank.

On 22 October 2019, the Ministry of Corporate Affairs (MCA) has issued certain notifications relating to the creation and maintenance of the data bank for independent directors. These relates to the following:

• Constitution of institute for data bank of independent directors

• Notification of the Companies (Creation and Maintenance of data bank of Independent Directors) Rules, 2019

• Compliances required by the independent directors

• Additional disclosure in board’s report.

This issue of First Notes provides an overview of the MCA notifications.

To access the text of the MCA notification on:

• Constitution of institute for data bank of independent directors, please click here

• Companies (Creation and Maintenance of data bank of Independent Directors) Rules, 2019, please click here

• Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, please click here

• Companies (Accounts) Amendment Rules, 2019, please click here.

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