NON-ACADEMIC ICAI UPDATE (NOT RELEVANT FOR EXAMS BUT FOR GENERAL AWARENESS)
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Please find text of the Amendment in Companies (Appointment and Qualification of Directors) Rules, 2014- A Chartered Accountant in practice for atleast 10 years is not required to clear online proficiency test to become Independent Director notification below –
Amendment in Companies (Appointment and Qualification of Directors) Rules, 2014- A Chartered Accountant in practice for atleast 10 years is not required to clear online proficiency test to become Independent Director
Corporate Laws & Corporate Governance Committee The Institute of Chartered Accountants of India
25th August, 2021
ANNOUNCEMENT
Sub: Amendment in Companies (Appointment and Qualification of Directors) Rules, 2014- A Chartered Accountant in practice for atleast 10 years is not required to clear online proficiency test to become Independent Director
This is to inform you that the Ministry of Corporate Affairs vide its notification dated 19th August 2021 has amended the provisions of Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014 to relax the requirements for passing self-proficiency test in respect of certain individuals/professionals.
Accordingly, now the Chartered Accountants who are or have been, in practice for at least ten years are not required to pass the online proficiency self-assessment test to become Independent Director.
The following amendments have been made in the aforesaid Rules. Analysis of which is given below:
| SNo. | Rule | Pre-Amendment | Post-Amendment |
| 1 | First Proviso to Rule 6(4) of Companies (Appointment and Qualification of Directors) Rules, 2014: Compliances required by a person eligible and willing tobe appointed | Provided that an individual shall not be required to pass the online proficiency self- assessment test when he has served for a total period of not less than three years as on the date of inclusion of his name in the data bank,- (B) in the pay scale of Director or above in the Ministry of Corporate Affairs or the Ministry of Finance or | Provided that an individual shall not be required to pass the online proficiency self- assessment test when he has served for a total period of not less than three years as on the date of inclusion of his name in the data bank,- (B) in the pay scale of Director or equivalent or above in any Ministry or Department, of theCentral Government or any |
| as anindependent director | Ministry of Commerce and Industry or the Ministry of Heavy Industries and Public Enterprises and having experience in handling the matters relating to corporate laws or securities laws or economic laws; or | State Government, and having experience in handling,— The matters relating to commerce, corporate affairs, finance, industry or public enterprises; orThe affairs related to Government companies or statutory corporations set up under an Act of Parliament or any State Act and carrying on commercialactivities. | |
| 2 | Rule 6(4) of Companies (Appointment and Qualification of Directors) Rules, 2014: Compliances required by a person eligible and willing to be appointed as anindependent director | N.A. | Insertion of Third Proviso in Rule 6(4): Provided also that the following individuals, who are or have been, for at least ten years : an advocate of a court; orin practice as a chartered accountant; orin practice as a cost accountant; orin practice as a company secretary, shall not be required to pass the online proficiency self-assessmenttest. |
Notification is available at the link- https://egazette.nic.in/WriteReadData/2021/229158.pdf
Members may take note of the above and plan accordingly.
Sincerely Yours,
Chairman and Vice Chairman
Corporate Laws & Corporate Governance Committee The Institute of Chartered Accountants of India
Official Link of Amendment in Companies (Appointment and Qualification of Directors) Rules, 2014- A Chartered Accountant in practice for atleast 10 years is not required to clear online proficiency test to become Independent Director notification can be accessed from below –
https://resource.cdn.icai.org/66192clcgc53434.pdf
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Jai Hind, Vande Mataram
Team CA Study
