Independent Director
Registration
In Data Bank (IICA)
Legal Provision: Pursuant to the notification of the Ministry of Corporate
Affairs (“MCA”) dated October 22, 2019, an online data bank for the independent
directors (“Data Bank”) has been rolled out by the Indian
Institute of Corporate Affairs (“IICA”).
Introduction of Data Bank for IDs and inclusion
of name: MCA has introduced the concept of Data Bank for ID’s vide its
notification dated October 22, 2019 which came into effect from December 1,
2019. IICA has been authorized to create and maintain the Data Bank. Every
person who is currently acting and who is willing to appoint as an ID has to
register themselves with IICA by February 29, 2019 but it has been extended
upto April 30, 2020 by amendment dated February 28, 2020. For those intend to
be appointed as an ID, are required to apply for inclusion of name in the Data
Bank before such appointment.
Period of Registration: The application for inclusion of name in the Data Bank can be
for one year, five years or for the person’s life-time.
Fees: Individuals can apply by paying a fee of INR 5000 (+ GST) for
one year and fee for five years INR 15000 (+ GST) & Lifetime INR 25000 (+
GST)
Renewal: IDs will also have to get their registration renewed 30 days
before the expiry of the registration, unless the registration is availed
for life-time. If an ID fails to renew the registration, his/her name shall
stand removed from the Data Bank.
Additional declaration
by ID: Pursuant
to provisions of rule 6(3) of the Companies (Appointment and Qualification of
Directors) Rules, 2014, every ID is now required to declare that their names
are included in the Data Bank each time the independency declaration is
submitted under section 149(7) of CA, 2013. Further, the company has to declare
annually in its boards’ report that the IDs appointed on the Board have cleared
online proficiency self-assessment test conducted by IICA, unless they are
otherwise exempted from same.
Online proficiency
test: Every
individual whose name is entered in the Data Bank shall within 1 (one) year
from the date of inclusion of his/her name in the Data Bank shall appear for an
online proficiency self-assessment test and secure at least in aggregate 60
(sixty) per cent of the marks and failing which, his/her name shall stand
removed from the Data Bank of IICA. There’s no bar on how many times the test
can be taken.
Exemption from online
proficiency test: An
individual who has served a period of not less than 10 (ten) years either as
director or key managerial personnel in a
- · Listed public company or
- · Unlisted
public company having paid-up share capital of INR 10 (ten) crores or more
- ·
Body
corporate listed on a recognized stock exchange
shall not be required to pass online proficiency
self-assessment test. However, he/she will still be required to get his/her
name included in the Data Bank.
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DISCLAIMER: The information given in this document has been made on the basis of the provisions stated in the Notification. It is based on the analysis and interpretation of applicable laws as on date. Under no circumstances whatsoever, the blogger shall be responsible for any loss, claim, liability, damage(s) resulting from the use, omission or inability to use the information provided in the document.
By
CS Diwakar Agrawal
Mob: +91-9911746549
