The Ministry of Corporate Affairs (MCA), Government of India (GoI) through its notification dated 01 June 2022 (Notification), notified the Companies (Appointment and Qualification of Directors) Amendment Rules, 2022 (Amendment Rules) to further amend the Companies (Appointment and Qualification of Directors) Rules, 2014 (Rules).
Pursuant to the Rules, every person who is appointed to hold the office of a director is required to furnish to the concerned company a consent in writing to act as a director in form DIR – 2, on or before such appointment. The Amendment Rules mention that in case the person seeking such an appointment is a national of a country which shares land border with India (viz. China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan), then prior security clearance from the Ministry of Home Affairs (MHA), GoI would be required to be attached along with such consent and form DIR – 2 has been amended accordingly.
Moreover, every applicant, who intends to be appointed as a director of an existing company, is required to make an application electronically in form DIR – 3 to the MCA for allotment of a Director Identification Number (DIN). The Amendment Rules mention that no application number would be generated in case the person applying for the DIN is a national of a country which shares land border with India, unless prior security clearance from the MHA is attached along with such application and form DIR – 3 has been amended accordingly.
The Amendment Rules deal only with the new appointments of directors and do not prescribe any provision in relation to the nationals from land-border sharing countries who are presently directors on the boards of the Indian companies and in this regard, clarity is awaited from the MCA.
The Notification, which may be accessed through the following link:
https://egazette.nic.in/WriteReadData/2022/236214.pdf, would further assist the GoI to keep a check on the bona fides of the foreign investment and foreign nationals considering appointment as directors in the Indian companies, from countries sharing land-border with India.