Due date for filing MGT-7 & AOC-4 extended

The Ministry of Corporate Affairs (MCA) has extended the date for filing annual returns, MGT-7 to 31-December 2019 and AOC-4 to 30-November-2019. There will be no additional fee for filing by that date.

Any delay beyond 30-Nov shall attract additional fee of Rs. 100 per day starting from the original due date.

Proficiency Examination mandatory for Independent Directors?

Independent Director play a crucial role to maintain good governance practices and corporate credibility. They have to keep track of company’s overall regulations on quarterly basis & ensure sustained accountability. Listed companies and certain unlisted Public Companies, should mandatorily appoint  Independent Directors who will constitute at least 1/3rd the total strength of directors. Independent Directors have been under the scanner recently for irregularities in the companies they were serving.

In order to ensure that such instances do not repeat, the MCA intends to create a databank of qualified Independent Directors. This databank shall be maintained by the Indian Institute of Corporate Affairs (IICA).

On 22-October-2019, the Government notified the Companies (Creation and Maintenance of Databank of Independent Directors) Rules, 2019 & has introduced an online proficiency self-assessment test for Independent directors. This rules will be effective from 1-December-2019.

• Every individual whose name is included in the databank shall have to pass online proficiency self-assessment test conducted by IICA within 1 year from the date of inclusion of his name in the databank, failing which, his / her name would be removed from the databank of the institute,
• Individuals who have served for a period of 10 years as on date of inclusion of his / her name in databank as director or Key Managerial Personnel (KMP) in specified companies shall be exempt from the examination. However, registration with IICA would be mandatory.
• There is no limit on number of attempts for an individual for qualifying the online proficiency self-assessment test.

A person who has already been appointed as an independent director as on December 1, 2019 shall within 3 months of commencement of the Rules apply online to IICA for inclusion of his or her name in the data bank. On and after Dec 01, 2019, a person who intends to get appointed as an independent director in company shall apply to IICA for inclusion of his name in the data bank for a period of 1 year or 5 years or for his life-time, and from time to time shall renew his membership.

The databank shall contain personal and professional details of the Independent Directors. The information available in the data bank shall be provided only to the companies required to appoint independent director after paying reasonable fee to the Institute.

In case of any questions, please do not hesitate to reach out to us on pavan@bclindia.in or vighnesh@bclindia.in or write to us on bclindia.in/contact/. We would be glad to be of your assistance.