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Amendment in Companies (Appointment and Qualification of Directors) Rules, 2014 – Detailed Analysis

Amendment in Companies (Appointment and Qualification of Directors) Rules, 2014 – Detailed Analysis

The government introduced a major amendment in the Companies (Appointment and Qualification of Directors) Rules, 2014 vide Notification dated 1st June 2022 as an additional measure for the security of India. The amendments have been made applicable with immediate effect from 1st June 2022. Following are the major changes:

  • Consent to act as director: The persons who are appointed as directors are required to give their consent in writing to act as directors in Form DIR-2. However, in case the person who is seeking directorship is a national of a country that shares land border with India, then along with Form DIR-2, necessary security clearances from the Ministry of Home Affairs shall also be attached.
  • Allotment of DIN: In case, the application for allotment of DIN in Form DIR-3 is made by a person who is a national of a country that shares land border with India, the application number shall be generated only if the necessary security clearances from the Ministry of Home Affairs are attached along with the application for DIN.

Necessary changes have also been made in Form DIR-2 (Consent to act as a director) and Form DIR-3 (Application for allotment of DIN) whereby the applicant shall be required to declare whether he needs to obtain the necessary security clearances or not. 

Countries that share land borders with India

While the names of the countries have not been mentioned in the notification, an inference can be drawn from the Ministry of Home Affairs to determine the countries that share land borders with India. As per the above amendments, nationals of the following countries, sharing their land borders with India, shall be required to obtain necessary security clearances from MHA:

  • China
  • Nepal
  • Bhutan
  • Bangladesh
  • Pakistan
  • Myanmar
  • Afghanistan

In case of any assistance, please feel free to contact the ASC Group.

 

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