Companies Act

Independent directors relatives also should not be indebted /guarantor to company/associates for Rs. 50 Lakhs or more – Notification

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

Notification

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]

Sd/
(K.V.R. Murty)
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 >>

 

Share

Recent Posts

  • Income Tax

No immunity from prosecution u/s 276B merely because TDS was deposited belatedly

Assessee cannot be granted immunity from prosecution u/s 276B for late deposit of TDS merely because ultimately TDS was deposited…

10 hours ago
  • Income Tax

Section 44C applies to exclusive expenditure by head office by non resident assessee – SC

Section 44C applies to exclusive expenditure on head office for the Indian branches incurred by non resident assessee’s. In a…

11 hours ago
  • Insurance

MV Act Compensation to parents of child died is at different footing than disabled child

Compensation under motor vehicle Act to parents of child died attract a less multiplier than from that of a claim…

12 hours ago
  • GST

Extension of time limit for furnishing GSTR 3B under Delhi GST Act 2017

Extension of time limit for furnishing GSTR 3B under Delhi GST Act 2017 Department of Trade and Taxes(Policy and Research…

18 hours ago
  • ICAI

Audit Fee to be received only by digital modes/banking channels -ICAI revises Ethics

Acceptance of Audit Fee only through digital modes or banking channels from 01.04.2026 – ICAI revises Code of Ethics  In…

1 day ago
  • Service Tax

Demand set aside as assessee for period covered had discharged tax liability under SVLDRS

High Court sets aside demand notices in respect of a period, for which the assessee had discharged tax liability under…

1 day ago