MCA’s New Rules for Directors: Effective August 2024

July 16, 2024 by Pooja Gupta

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The Ministry of Corporate Affairs (MCA) has recently issued a notification introducing amendments to the Companies (Appointment and Qualification of Directors) Rules, 2014. These changes aim to enhance transparency and streamline processes related to the appointment and qualification of directors. The amendments will come into effect on 1st August 2024.

Update Frequency for Personal Information: Clause Insertion: In Rule 12A, after the word “only,” the words and figures “on or before 30th September of the financial year” have been inserted. This addition specifies that the personal information updates should be done within the stipulated timeframe each year.

Additional Proviso: A new proviso has been added, which states:

“Provided also that if an individual intends to update his personal mobile number or the email address again at any time during the financial year in addition to the up-dation allowed under the third proviso, he shall update the same by submitting e-form DIR-3 KYC on payment of fees of five hundred rupees.”

This allows directors to update their personal mobile numbers or email addresses multiple times within a financial year by submitting the e-form DIR-3 KYC and paying a fee of INR 500.

Implementation Date

These amendments will be effective from 1st August 2024, giving companies and directors ample time to prepare for compliance with the new rules.

Background

The principal rules were originally published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide notification number G.S.R. 259(E), dated 31st March 2014, and were last amended by notification number G.S.R. 38(E), dated 20th January 2023.

The MCA’s amendments are designed to ensure that the directors’ personal information is up-to-date and accurate, thus fostering better governance and communication within companies. Directors are advised to comply with these new requirements promptly to avoid any potential penalties or issues.

For more information, refer to the official notification issued by the MCA on 16th July 2024.

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Pooja Gupta