Independent directors relatives also should not be indebted /guarantor to company for Rs. 50 Lakhs or more Change in directors appointment Rules
MCA has notified Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2018 by making amendment to the Companies (Appointment and Qualification of Directors) Rules, 2014.
The Rule 5 has been has been amended to provide that none of the relatives of an independent director should be indebted to the company or has given a guarantee to its holding, subsidiary or associate company or their promoter or directors for an amount of Rs. 50 Lakhs at any time during the two immediately preceding financial years or during current financial year.
Also the forwarding of copy of resignation of director to RoC has been made optional.
Ministry of Corporate Affairs
New Delhi, the 7th May, 2018
G.S.R. (E). – In exercise of the powers conferred by sections 149 and 168 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Appointment and Qualification of Directors) Rules, 2014, namely:-
1. (1) These rules may be called the Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2018.
(2) They shall come into force on the date of their publication in the official Gazette .
2. In the Companies (Appointment and Qualification of Directors) Rules, 2014, rule 5 shall be numbered as sub-rule (1) thereof, and after sub rule (1) as so numbered, the following sub-rule shall be inserted, namely:-
“(2) None of the relatives of an independent director, for the purposes of sub-clauses (ii) and (iii) of clause (d) of sub-section (6) of section 149,-
(i) is indebted to the company, its holding, subsidiary or associate company or their promoters, or directors; or
(ii) has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, its holding, subsidiary or associate company or their promoters, or directors of such holding company,
for an amount of fifty lakhs rupees, at any time during the two immediately preceding financial years or during the current financial year .”
3. In the principal rules, in rule 16, for the word “shall”, the word “may” shall be substituted.
[F. No. 1/22/2013-CL.V-Part-III]
Joint Secretary to the Government of India
Note:- The principal rules were published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide notification number G.S.R. 259(E), dated the 31st March, 2014 and subsequently amended vide the following notifications:-
|Serial Number||Notification Number||Notification Date|
|1.||G.S.R. 671(E)||18th September, 2014|
|2.||G.S.R. 42(E)||19th January, 2015|
|3.||G.S.R. 839(E)||5th July, 2017|
|4.||G.S.R. 51 (E)||22nd January, 2018.|
Download Notification Click Here >>
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