Government eases procedural norms for directors in new companies law

NEW DELHI: Simplifying the procedural requirements, the government has amended rules governing appointment and qualification of directors under the new companies law.

The changes have been made through the Companies (Appointment and Qualification of Directors) Amendment Rules, 2014, according to the Corporate Affairs Ministry.

These rules provide for establishing a data bank of persons who offer to be independent directors on the board of companies.

Now, the Ministry has done away with clauses that required concerned persons to include PAN details as well as their mother's and spouse's names in the data bank, among others.

Sai Venkateshwaran, Partner and Head - Accounting Advisory Services - KPMG in India, said the latest changes have been made "with a view to addressing privacy concerns of directors and simplifying some of the procedural requirements for directors".

Further, some of the filing requirements have been simplified by omitting the need to file using certain prescribed forms, and some of the other forms have been amended, he added.

The Ministry, which is implementing the new Companies Act, has made the amendments through a notification dated September 18.

Under the Companies Act, 2013, there are strict provisions, including for independent directors and auditors, for ensuring high corporate governance standards.