AMENDMENT TO APPOINTMENT AND QUALIFICATION OF DIRECTORS RULES


Indian Ministry of Corporate Affairs brought an amendment in the Companies (Appointment and Qualification of Directors) Rules 2014 with effect from 18th       September 2014.

Databank:

Now data bank shall not ask for income – tax Permanent Account Number (PAN), [Rule 6(2)(c)]

Only Father’s name will be in record. There will no need for mother’s name and spouse name. I am always of the view there should be option to give name of either of parents on part of person, because law must be gender neutral. [Rule 6(2)(d)]

In earlier rules there was requirement to file a Form DIR – 1 with the agency maintaining such databank. Now, agency is free to use its own format. [rule 6(4)]

Form DIR – 1 omitted. [Section 2(7) of Amendment Rules]

Application for Director Identification Number:

Under Rule 9(3), earlier there was a requirement to fill particulars and just sign the form. Now, applicant shall verify the contents before signing the form, before signing. [Rule 9(3)(a)]

Earlier requirement for verification by applicant in DIN – 4 is dispensed with. [Rule 9(3)(a)(iv)]

For persons who do not have a last name, now law shall force them to use either father’s or grandfather’s surname as last name along with the declaration in Form No. DIR 3A. [Rule 9(4)

What one will do in case father and grandfather also do not have surname?

I strongly oppose this rule which is against the fundamental right of freedom of expression and Right to life given under our Constitution of India. Every person has a right to have name of its own choice and live with dignity with name of its own choice. Whether a person use a surname or not is his/her own freedom. Further, until Central Asian or European came to India, there was no requirement and history of surname in India.

Allotment of DIN:

Now, there will not be a provisional DIN generated automatically but an application number generate automatically. [Rule 10(1)]

In an earlier post here, this blog in an earlier post here pointed out issues related to provisional Director Identification Numbers which resulted in political controversy on holding of multiple DIN by some politicians and businessperson. This provision here deal with the issued decently.

The DIN shall be allotted by government with reference to this application number. [Rule 10(2)]

Defaulter’s DIN:

Indian law always care for those, who do not care law in name of doing business. I agree, there must be ease in doing business in India.

Every director, functioning as a director in one or more companies on or before the 30th June, 2007 and who has not yet intimated his DIN to such company or companies shall, within one month of the receipt of Director Identification Number from the Central Government, intimate his Director Identification Number to the company or all companies wherein he is a director as per Form DIR-3B. [Rule 10A(1)]

The intimation by the company of Director Identification Number of its directors under section 157 of the Act shall be furnished in Form DIR-3C within fifteen days of receipt of intimation under section 156. [Rule 10A(2)]

Good thing, all directors who are in default since last 7 years may correct the default in respect of applying DIN and intimating this to Companies.

Every director, functioning as a director in one or more companies on or before the 30th June, 2007 and who has not yet intimated his DIN to such company or companies shall, within one month of the receipt of Director Identification Number from the Central Government, intimate his Director Identification Number to the company or all companies wherein he is a director as per Form DIR-3B. [Rule 10A(1)]

The intimation by the company of Director Identification Number of its directors under section 157 of the Act shall be furnished in Form DIR-3C within fifteen days of receipt of intimation under section 156. [Rule 10A(2)]

Cancellation or Surrender or Deactivation of DIN:

Fee is introduced for Form DIN – 5 for cancellation or surrender or deactivation of DIN.

Intimation of changes in particulars specified in DIN application:

The applicant shall download Form DIR-6 from the portal, fill in the relevant changes, verify the Form and attach duly scanned copy of the proof of the changed particulars and submit electronically.

Changes in Forms:

Form DIR – 1 omitted. [Section 2(7) of Amendment Rules]

Form DIR – 4 omitted. [Section 2(10) of Amendment Rules]

Form DIR – 7 omitted. [Section 2(12) of Amendment Rules]

Form DIR – 3A, DIR – 3B and DIR – 3C inserted.

Form DIR – 3 substituted.

FORM DIR – 6 substituted.

Please note: I welcome your comments and feedback. This blog post is not a professional advice. Readers may share this post on social media by using buttons given here.

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One response to “AMENDMENT TO APPOINTMENT AND QUALIFICATION OF DIRECTORS RULES

  1. Pingback: Index of Companies Law Posts | AishMGhrana

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