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Section 150

Manner of selection of independent directors and maintenance of databank of independent directors

Regulation 25 of LODR

Section 150. Manner of selection of independent directors and maintenance of databank of independent directors.

(1)
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:
Proviso

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.

(2)
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.
(3)
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
(4)
The Central Government may prescribe the manner and procedure of selection of independent directors who fulfil the qualifications and requirements specified under section 149.
(5)
of section 149
Notes, amendments & references (5)

Section 150 shall not apply to section 8 companies vide notification no. G.S.R. 466(E) dated 5th June, 2015.

(The exceptions, modifications and adaptations provided above shall be applicable only to those companies covered under section 8 of the said act which has not committed a default in filing its financial statements under section 137 of the said act or annual return under section 92 of the said act with the registrar, vide notification dated 13th June, 2017)

To view the notification, Click Here

Substituted vide Notification notifying the Indian Institute of Corporate Affairs at Manesar (Haryana) as Data Bank dated 22.10.2019 w.e.f., 01.12.2019. To view the notification, Click Here

Refer Rule 6-Companies (Appointment and Qualification of Directors) Rules,2014.To view the rule, Click Here