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

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Mar 31, 2023

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

The MCA by way of a Notification dated January 20, 2023, has amended the Companies (Appointment and Qualification of Directors) Rules, 2014. Below is a summary of the key changes, which have come into effect from January 23, 2023:

i. A director is now required to file form DIR-8 with the company if he/ she is disqualified under the grounds set out in Section 164(1) of the Companies Act, 2013 (‘Companies Act’) (previously this filing was required only for disqualification under Section 164(2) of the Companies Act, e. where the company does not file financial statements or annual returns for any continuous period of three financial years or fails to repay deposits etc.). The grounds for disqualification under Section 164(1) of the Companies Act inter alia include such director:

being an undischarged insolvent or of unsound mind,
having failed to pay for six months beyond the due date, any calls of any shares held by him / her,
has been disqualified from being appointed as a director by an order of court or tribunal;

ii. Upon receipt of form DIR-8 from such director, the company is now required to file form DIR-9 with the Registrar of Companies within 30 days of its receipt; and

iii. An application for removal of disqualification of director in Form DIR-10 is now required to be filed before the Regional Director. Previously, the authority before whom such form was to be filed was not specified.

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