valid as on 08/12/2019

Section 150. Manner of selection of independent directors and maintenance of databank of independent directors
Effective from 01-04-2014

Regulation 25 of LODR

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(1) Subject to the provisions contained in sub-section (5) of section 149, an   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, 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

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

Section 150 shall not apply to section 8 companies vide notification no. G.S.R. 466(E) dated 5th June, 2015.

(The exceptions, modifications and adaptations provided above shall be applicable only to those companies covered under section 8 of the said act which has not committed a default in filing its financial statements under section 137 of the said act or annual return under section 92 of the said act with the registrar, vide notification dated 13th June, 2017)

To view the notification,Click Here

2(47) Independent director means an independent director referred to in sub-section (5) of section 149
Substituted vide Notification notifying the Indian Institute of Corporate Affairs at Manesar (Haryana) as Data Bank dated 22.10.2019 w.e.f., 01.12.2019. To view the notification,Click Here
Refer Rule 6-Companies (Appointment and Qualification of Directors) Rules,2014.To view the rule,Click Here

11.1.6-Companies (Appointment and Qualification of Directors) Rules,2014

 Compliances required by a person eligible and willing to be appointed as an independent director. —

(1) Every individual –

(a) who has been appointed as an independent director in a company, on the date of commencement of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, shall within a period of three months from such commencement; or

(b)who intends to get appointed as an independent director in a company after such commencement, shall before such appointment,

apply online to the institute for inclusion of his name in the data bank for a period of one year or five years or for his life-time, and from time to time take steps as specified in sub-rule (2), till he continues to hold the office of an independent director in any company:

Provided that any individual, including an individual not having DIN, may voluntarily apply to the institute for inclusion of his name in the data bank.

(2)Every individual whose name has been so included in the data bank shall file an application for renewal for a further period of one year or five years or for his life-time, within a period of thirty days from the date of expiry of the period upto which the name of the individual was applied for inclusion in the data bank, failing which, the name of such individual shall stand removed from the data bank of the institute:

Provided that no application for renewal shall be filed by an individual who has paid life-time fees for inclusion of his name in the data bank.

(3) Every independent director shall submit a declaration of compliance of sub-rule (1) and sub-rule (2) to the Board, each time he submits the declaration required under sub-section (7) of section 149 of the Act.

(4) Every individual whose name is so included in the data bank under sub-rule (1) shall pass an online proficiency self-assessment test conducted by the institute within a period of one year from the date of inclusion of his name in the data bank, failing which, his name shall stand removed from the data bank of the institute:

Provided that the individual who has served for a period of not less than ten years as on the date of inclusion of his name in the databank as director or key managerial personnel in a listed public company or in an unlisted public company having a paid-up share capital of rupees ten crore or more shall not be required to pass the online proficiency self-assessment test:
Provided further that for the purpose of calculation of the period of ten years referred to in the first proviso, any period during which an individual was acting as a director or as a key managerial personnel in two or more companies at the same time shall be counted only once.

Explanation: For the purposes of this rule,-

(a) the expression “institute” means the ‘Indian Institute of Corporate Affairs at Manesar’ notified under sub-section (1) of section 150 of the Companies Act, 2013 as the institute for the creation and maintenance of data bank of Independent Directors;

(b) an individual who has obtained a score of not less than sixty percent. in aggregate in the online proficiency self-assessment test shall be deemed to have passed such test;

(c) there shall be no limit on the number of attempts an individual may take for passing the online proficiency self-assessment test.

6.Creation and maintenance of data bank of persons offering to become independent directors,—

(1) Any body, institute or association (hereinafter to be referred as “the agency”), which has been authorised in this behalf by the Central Government shall create and maintain a data bank of persons willing and eligible to be appointed as independent director and such data bank shall be placed on the website of the Ministry of Corporate Affairs or on any other website as may be approved or notified by the Central Government.

(2) The data bank referred to in sub-rule (1) shall contain the following details in respect of each person included in the data bank to be eligible and willing to be appointed as independent director—

  • DIN (Director Identification Number);
  • the name and surname in full;
  • the father’s name
  • the date of Birth;
  • gender;
  • the nationality;
  • the occupation;
  • full Address with PIN Code (present and permanent);
  • phone number;
  • e-mail id;
  • the educational and professional qualifications;
  • experience or expertise, if any;
  • any legal proceedings initiated or pending against such person;
  • the list of limited liability partnerships in which he is or was a designated partner along with—

(i)the name of the limited liability partnership;
(ii)the nature of industry; and
(iii)the duration- with dates;

  • the list of companies in which he is or was director along with —
    the name of the company;

(i) the name of the company;
(ii) the nature of industry;
(iii) the nature of directorship – Executive or Non-executive or Managing Director or Independent Director or Nominee Director; and
(iv) duration – with dates.

(3) A disclaimer shall be conspicuously displayed on the website hosting the databank that a company must carry out its own due diligence before appointment of any person as an independent director and “the agency” maintaining the databank or the Central Government shall not be held responsible for the accuracy of information or lack of suitability of the person whose particulars form part of the databank.

(4) Any person who desires to get his name included in the data bank of independent directors shall make an application to “the agency” 

(5) The agency may charge a reasonable fee from the applicant for inclusion of his name in the data bank of independent directors.

(6) Any person who has applied for inclusion of his name in the data bank of independent directors or any person whose name appears in the data bank, shall intimate to the agency about any changes in his particulars within fifteen days of such change.

(7) The databank posted on the website shall –

(a) be accessible at the specified website;

(b) be substantially identical to the physical version of the data bank;

(c) be searchable on the parameters specified in sub-rule (2);

(d) be presented in a format or formats convenient for both printing and viewing online; and

(e) contain a link to obtain the software required to view or print the particulars free of charge.

Substituted vide Companies (Appointment & Qualification of Directors) Fifth Amendment Rules, 2019 dated 22.10.2019 (Effective from 01.12.2019). To view the notification,Click Here
 Omitted by Notification No. G. S. R. 671 (E) dated 18 September 2014. To view the notification,Click Here
 Omitted by Notification No. G. S. R. 671 (E) dated 18 September 2014. To view the notification,Click Here
 Omitted by Notification No. G. S. R. 671 (E) dated 18 September 2014. To view the notification,Click Here

Companies (Appointment and Qualification of Directors) Amendment Rules, 2014 [GSR 671 (E)] dated 18/09/2014


Companies (Appointment & Qualification of Directors) Fifth Amendment Rules, 2019 dated 22.10.2019


Enforcement Notification S.O. 902(E) dated 26/03/2014


Exemptions to Section 8 Companies [Amendment to GSR 466(E)] dated 13/06/2017


Exemptions to Section 8 companies [GSR 466 (E)] dated 05/06/2015


Notification notifying the Indian Institute of Corporate Affairs at Manesar (Haryana) as Data Bank dated 22.10.2019 w.e.f., 01.12.2019


Form DIR-1 Application to inclusion of name in the databank of Independent Directors


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