Manner of Selection of Independent Directors and Maintenance of Databank of Independent Directors
Section 1[150(1) of the Companies Act 2013
- 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.
Section 150(2) of the Companies Act 2013
- 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.
Section 150(3) of the Companies Act 2013
- 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.
Section 150(4) of the Companies Act 2013
- The Central Government may prescribe the manner and procedure of selection of independent directors who fulfil the qualifications and requirements specified under section 149.]
Exception/ Modification/ Adaptation
1. In case of section 8 company – Section 150 shall not apply – Notification dated 5th june, 2015.
Notification under Section 150
1.Notification Dated 22nd October 2019