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Section 150 of the Companies Act 2013: Manner of Selection of Independent Directors and Maintenance of Databank of Independent Directors

SECTION-150 (Manner of selection of independent directors and maintenance of databank of independent directors) under CHAPTER-XI (Appointment and Qualification of Directors) of the Companies Act, 2013

(1) Subject to the provisions contained in sub-section (5) of section 149, an independent director may be selected from a data bank containing names, addresses and qualifications of persons who are eligible and willing to act as independent directors, maintained by any body, institute or association, as may by notified by the Central Government, having expertise in creation and maintenance of such data bank and put on their website for the use by the company making the appointment of such directors:

Provided that responsibility of exercising due diligence before selecting a person from the data bank referred to above, as an independent director shall lie with the company making such appointment.


(2) The appointment of independent director shall be approved by the company in general meeting as provided in sub-section (2) of section 152 and the explanatory statement annexed to the notice of the general meeting called to consider the said appointment shall indicate the justification for choosing the appointee for appointment as independent director.

(3) The data bank referred to in sub-section (1), shall create and maintain data of persons willing to act as independent director in accordance with such rules as may be prescribed.

(4) The Central Government may prescribe the manner and procedure of selection of independent directors who fulfill the qualifications and requirements specified under section 149.






Extra Notes for Readers

(1) The Companies Act, 2013 received the assent of the President on the 29th August, 2013 (Published in the Gazette of India, Extraordinary, Part II - Section 1 by Ministry of Law and Justice, Legislative Department on 30th August, 2013) - link


(2) Section 150 of the Companies Act 2013 was notified by MCA Notification S.O. 902(E) dated 26th March 2014 (w.e.f. 1st April 2014) - link

(3) Relevant rule(s) of the Companies (Appointment and Qualification of Directors) Rules, 2014 (w.e.f. 1st April 2014) link
  • Rule 6 - Creation and maintenance of databank of persons offering to become independent directors
[Also check amendments, if any, to the Companies (Appointment and Qualification of Directors) Rules, 2014]

(4) Section 8 Companies - MCA Notification G.S.R. 466(E) dated 5th June, 2015 - link


Serial
Number
Provisions of the Act
Exceptions, Modifications and Adaptations
10.
Section 150.
Shall not apply.






This page was last updated on 27th March, 2017.

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