Under Section 149(6) Companies Act 2013, which one of the following is NOT a condition for a person to be eligible as 'independent director'?
AThe person must be a person of integrity, possessing relevant expertise and experience
BThe person should NOT be a promoter of the company / holding / subsidiary / associate, and should NOT be related to a promoter or director
CThe person should NOT have, OR have had, any PECUNIARY RELATIONSHIP (other than remuneration / transactions not exceeding 10% of his total income) with the company / holding / subsidiary / associate / promoters / directors during the two immediately preceding financial years or during the current financial year
DThe person must be a member of the Institute of Chartered Accountants of India by qualification
Answer & Solution
Correct answer: D. The person must be a member of the Institute of Chartered Accountants of India by qualification
1. Section 149(6) lists multiple conditions for an INDEPENDENT director (integrity, no pecuniary relationship, no relative pecuniary relationship beyond 2%, not promoter or related to promoter, not KMP in preceding 3 years, etc.).
2. There is NO requirement that an independent director must be a member of any particular professional body (Chartered Accountancy, Bar Council, etc.). General expertise/experience suffices.
3. After 2019 amendment, independent directors must register with the Independent Directors Databank maintained by IICA and pass a proficiency online exam (Rule 6 Companies (Appointment) Rules 2014).
4. Hence option D is NOT a condition under Section 149(6).
_Source: Companies Act 2013 (Act 18 of 2013), Govt. of India MCA — Companies Act 2013, Section 149(6); Companies (Appointment & Qualification of Directors) Rules 2014_
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