e-Registration for Independent Directors
- 08 May 2019
- 2 min read
The Ministry of Corporate Affairs (MCA) is considering a proposal under which all independent directors of corporates may have to go through a registration process.
- A corporate administrator or a promoter, who may be an executive director on the board, will also have to register if he or she is an independent director on the board of another company.
- The registration process will be in addition to the Director Identification Number (DIN), where a KYC process was recently undertaken.
- The move follows earlier efforts by the ministry to put in place a screening mechanism for independent directors after several Indian companies led by IL&FS were hit by a series of irregularities and the role of several individuals had come under the scanner.
- An independent director is a non-executive director who does not have any pecuniary relationship with the company, its promoters, senior management or affiliate companies, is not related to promoters or the senior management, and/or has not been an executive with the company in the three preceding financial years.
Director Identification Number (DIN)
- DIN is a unique identification number allotted by the Central Government to any person intending to be a director or an existing director of a company.
- It is an 8-digit identification number which has lifetime validity. Through DIN, details of the directors are maintained in a database.
- DIN is specific to a person, which means even if he is a director in two or more companies, he has to obtain only one DIN. And if he leaves a company and joins some other, the same DIN would work in the other company as well.