Clarifications on Rules prescribed under the Companies Act, 2013 - Matters relating to appointment and qualifications of directors and Independent directors

Posted Date : 10-Jun-2014 , 07:17:50 pm | Posted By CASANSAAR print

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MCA - Circular - 9th June - Clarification related to appointment and qualification of Independent Directors (IDs).

1. Any Arms length transaction entered by the ID would not attract the bar of pecuniary relationship as specified in section 149(6)(c).

2. Pecuniary relationship as provided in section 149(6)(c) does not include receipt of remuneration from one or more company by the way of fees under section 197(5), reimbursement of the expenses and profit related commission as approved by the members.

3. An ID can be appointed for a period of less than 5 years but the term is treated as one term under section 149(10).

4. Appointment of IDs under the new act required to be formalized with Letter of Appointment, no need for existing IDs.

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