{"id":52085,"date":"2023-02-01T14:12:13","date_gmt":"2023-02-01T08:42:13","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=52085"},"modified":"2023-02-01T14:17:20","modified_gmt":"2023-02-01T08:47:20","slug":"companies-appointment-and-qualification-of-directors-amendment-rules-2023","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/companies-appointment-and-qualification-of-directors-amendment-rules-2023\/","title":{"rendered":"Companies (Appointment &#038; Qualification of Directors) Amendment Rules, 2023"},"content":{"rendered":"\n<p>The Ministry of Corporate\nAffairs or the MCA, vide a notification dated 20 January 2023, amended the Companies (Appointment &amp; Qualification of\nDirectors) Rules of 2014 through Companies (Appointment &amp; Qualification of\nDirectors) Amendment Rules, 2023. The\nnotification primarily focuses on amending Rule 14 of the 2014 Rules, which\npertains to the directors&#8217; disqualification as per the provisions of Section\n164 of the Companies Act of 2013, and also specific changes in a few MCA forms\npertaining to the directors of a company. The Companies (Appointment &amp; Qualification of\nDirectors) Amendment Rules, 2023, became effective from 23 January 2023.<\/p>\n\n\n\n<p>Amendments to\nRule 14 of the Companies (Appointment &amp; Qualification of Directors)\nAmendment, 2014<\/p>\n\n\n\n<ul><li>Sub-rule 1 of Rule 14, was amended to insert the words \u201c<strong>sub section (1)<\/strong>\u201d after the phrase &#8220;<strong>disqualification under<\/strong>\u201d.<br>Rule 14 of the Companies (Appointment &amp; Qualification of Directors) Rules of 2014 pertains to directors&#8217; disqualification under Section 164 of the Companies Act of 2013. Before the amendments, Rule 14 only dealt with disqualifications provided under Section 164(1). The amendment has the effect of bringing the disqualifications mentioned under Section 164(1) under the purview of Rule 14.  Section 164 of the Companies Act of 2013 pertains to disqualifications for the appointment of directors.<br>Section 164(1) states that a person will be disqualified from being appointed as a director of a company in the circumstances mentioned below: <ul><li>She\nis a person of unsound mind and has been declared so by a competent court.<\/li><li>She\nis an undischarged insolvent.<\/li><li>She\nhas applied to the appropriate authority to be declared as an insolvent, and\nthe application is still pending.<\/li><li>She\nhas been convicted for an offence involving moral turpitude or otherwise by a\ncourt of competent jurisdiction, and the sentence for the imprisonment of such\nan offence is not less than six months, and five years have not elapsed from the\ndate on which the sentence expires.<\/li><li>If she\nhas been convicted of an offence and has been sentenced to be imprisoned for a\nperiod of 7 years or more.<\/li><li>There\nexists any order which has been passed by a competent court or tribunal that\ndisqualifies her from being appointed as a director, and such order is still in\nforce.<\/li><li>If\nshe has been convicted of an offence as provided under Section 188 of the Companies\nAct of 2013 in association with a related party transaction during the last\nfive years.<\/li><li>If\nshe has not paid any calls in relation to the shares of a company which are\nheld by her either alone or jointly is another person, and a period of 6 months\nhas passed on the date on which the payment of the call is required to be made.<\/li><li>She\nhasn&#8217;t complied the provisions of Section 152(3) of the Companies Act of 2013. Section\n152(3) states that a person won&#8217;t be appointed as one of the directors of a\ncompany unless she has been allotted the Director Identification Number or DIN\nor any other number which has been prescribed under Section 153 of the\nCompanies Act of 2013 which pertains to application for allotment Director\nIdentification Number.<\/li><li>She\nis not in compliance with the provisions of section 165(1) of the Companies Act\nof 2013, which states the number of directorships a person can hold, including\nalternate directorship.<\/li><\/ul><\/li><\/ul>\n\n\n\n<p>The disqualification from being appointed as\na director under Section 164(2) pertains to someone who is already a director\nof a company which has defaulted in filing annual returns or financial\nstatements for a continuous period of 3 years. Such a person is disqualified\nfrom being appointed as the director of another company. Moreover, it is also\nstated that if a company has defaulted in paying back deposits accepted by it or\nany interests thereon or failed to redeem a debenture or interest due on it or\nhas defaulted in paying the dividend, it shall not be appointed as a director\nin another company re-appointed as a director in the same company whether\ndefault took place if the failure to redeem or pay continued for a period of\nmore than a year. The bar from such appointment or reappointment shall be for a\nperiod of 5 years from the date of default.<\/p>\n\n\n\n<ul><li>A new\nsub rule has been inserted after Rule 14 (1). The newly inserted Rule 14 (1A)\nstates that whenever information under Form DIR-8 is received by a company, such\ncompany shall file Form DIR-9 with the registrar before the expiry of 30 days from\nwhen information under Form DIR-8 is obtained.<\/li><\/ul>\n\n\n\n<p>The insertion has the effect of placing an\nobligation on companies to file Form DIR-9 on receiving information pertaining\nto disqualification under Section 164 (1) and (2) under Form DIR-8.<\/p>\n\n\n\n<p>Form DIR-8 is filed by a person to intimate\nthe existence of any disqualifications which bar her from being appointed as\none of the directors of a company as is given under section 164 of the\nCompanies Act of 2013. Form DIR-9 is required to be filed by companies to report\nto the registrar any information received in relation to the disqualification\nof a person from being appointed as a director under Form DIR-8.<\/p>\n\n\n\n<p>Earlier, the mandate was to file Form DIR-9 only\nwhen Form DIR-8 was filed by the director giving details of disqualification for\nreasons as per Section 164(2) of Companies Act of 2013. However, post the\namendment. Companies are required to file form DIR-9 when details of\ndisqualification as per both Section 164(1) and (2) are filed by a director\nunder Form DIR-8.<\/p>\n\n\n\n<ul><li>The other amendment is brought about in Rule\n14 (5) of the Companies\n(Appointment &amp; Qualification of Directors) Rules of 2014 by the insertion of the terms \u201c<strong>and filed\nbefore the regional director<\/strong>\u201d after the words \u201c<strong>Form DIR-10<\/strong>\u201d. <\/li><\/ul>\n\n\n\n<p>Form DIR-10 pertains to the application for\nthe removal of the disqualification of directors.<\/p>\n\n\n\n<p>The amendment makes it obligatory for any\napplication pertaining to the removal of the disqualification of directors to be\nfiled before the regional director. Earlier, it was not stated where the\napplication under Form DIR-10 was supposed to be filed.<\/p>\n\n\n\n<ul><li>An annexure is also attached to the\namended rules, which contains the updated version of the below mentioned forms.\nThe updated version shall substitute the earlier versions of these forms. The\nforms are:<ul><li><strong>Form DIR-3<\/strong>: This form is filed to apply for\nthe allotment of the DIN or Director Identification Number prior to being\nappointed as a director in an existing LLP or company Section 153 all the Companies Act of 2013, Rule 9(1) of\nthe Companies\n(Appointment &amp; Qualification of Directors) Rules of 2014 and Rule 10 of the <strong><a class=\"text-primary\" href=\"https:\/\/corpbiz.io\/llp-registration\">Limited Liability Partnership<\/a><\/strong> Rules of 2009.<\/li><li><strong>Form DIR-3C<\/strong>: This form is filed by\ncompanies to provide information about the managing director, directors,\nsecretaries and managers of the company in accordance with Section 157 all the Companies Act of 2013 and Rule 10A\n(2) of the Companies\n(Appointment &amp; Qualification of Directors) Rules of 2014.<\/li><li><strong>Form DIR-5<\/strong>: This form is filed to apply for surrendering the DIN\nor Director Identification in\naccordance with Section 153 all the Companies Act of 2013 and Rule 11 of the Companies (Appointment &amp; Qualification of\nDirectors) Rules of 2014.<\/li><li><strong>Form\nDIR-6<\/strong>: This form is to be filed to the Central\nGovernment to give information pertaining to any change in the details of the\ndirectors of a company or designated partners of an LLP in accordance with Rule 12 of the Companies (Appointment &amp; Qualification of\nDirectors) Rules of 2014.<\/li><li><strong>Form DIR-8<\/strong>:&nbsp; This form is\nfiled by persons to\nintimate the existence of any disqualifications which bar her from being appointed\nas a director of a company as is given under section 164 (1) or (2) of the\nCompanies Act of 2013 and Rule 14(1) of the Companies (Appointment &amp; Qualification of\nDirectors) Rules of 2014.<\/li><li><strong>Form DIR-9<\/strong>: Form DIR-9 is required to be filed by companies to report\nto the registrar any information received in relation to the disqualification\nof a person from being appointed as a director under Form DIR-8 in accordance\nwith Section 164 all the Companies Act of 2013 and Rule 14(2) of the Companies (Appointment &amp; Qualification of\nDirectors) Rules of 2014.<\/li><li><strong>Form DIR-10<\/strong>: This form pertains to the application for the removal\nof disqualification of directors in accordance with Section 164 all the\nCompanies Act of 2013 and Rule 14(5) of the Companies (Appointment &amp; Qualification of\nDirectors) Rules of 2014.<\/li><li><strong>Form DIR-11<\/strong>: This form is filed to provide notice of registration of\na director to the registrar of companies in accordance with Section 168(1) of\nthe Companies Act of 2013 and Rule 16 of the Companies (Appointment &amp; Qualification of\nDirectors) Rules of 2014.<\/li><li><strong>Form DIR-12<\/strong>: This form is filed to provide particulars in relation\nto the appointment of directors and key managerial personnel and any changes\namong the particulars as per Section 7(1) (c), Section 168 and Section 170(2) of\nthe Companies Act of 2013, Rule 17 of the Companies (Incorporation) Rules of\n2014 and Rules 8, 15, 18 of the Companies (Appointment &amp; Qualification of Directors) Rules of 2014.<\/li><\/ul><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>The Ministry of Corporate Affairs or the <strong>MCA<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/home.html\"><strong>[1]<\/strong><\/a><\/sup>, vide a notification dated 20 January 2023, amended the Companies (Appointment &amp; Qualification of Directors) Rules, 2014 through Companies (Appointment &amp; Qualification of Directors) Amendment Rules, 2023. The Companies (Appointment &amp; Qualification of Directors) Amendment Rules, 2023, became effective from 23 January 2023. The notification primarily focuses on amending Rule 14 of the 2014 Rules, which pertains to the disqualification of directors under Section 164 of the Companies Act of 2013, and also on specific changes in a few DIR forms of the MCA pertaining to the directors of a company.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read Our Article<\/b>: <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/independent-director-appointment-criteria-process-roles-duties\/\">Independent Director: Appointment Criteria, Process, Roles &amp; Duties<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Ministry of Corporate Affairs or the MCA, vide a notification dated 20 January 2023, amended the Companies (Appointment &amp; Qualification of Directors) Rules of 2014 through Companies (Appointment &amp; Qualification of Directors) Amendment Rules, 2023. The notification primarily focuses on amending Rule 14 of the 2014 Rules, which pertains to the directors&#8217; disqualification as [&hellip;]<\/p>\n","protected":false},"author":47,"featured_media":52086,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[272],"tags":[3043],"acf":{"service_id":"217"},"authorName":"Sherin Jose","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/11\/MicrosoftTeams-image-4-e1668575330329.jpg","authorDescription":"Sherin has degrees in Law and English Literature from the University of Delhi. She is adept at legal research and writing and enjoys discussing and analysing important legal developments. Her primary interests lie in Corporate, FinTech and IPR Law and she is always on the lookout for exploring new developments in the area. She is an avid reader who loves classics and contemporary fiction. She likes to travel, bake and obsess over cat videos in her free time.","postViews":5605,"readingTime":6,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/52085"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/47"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=52085"}],"version-history":[{"count":4,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/52085\/revisions"}],"predecessor-version":[{"id":52091,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/52085\/revisions\/52091"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/52086"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=52085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=52085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=52085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}