Section 150 of the Companies Act, 2013
Section 150 of the Companies Act, 2013 deals with the manner of selection of independent directors and maintenance of data bank of independent directors.
🔹 Section 150 – Manner of Selection of Independent Directors and Maintenance of Data Bank
(1) An independent director shall be selected from a data bank containing names, addresses, and qualifications of persons who are eligible and willing to act as independent directors.
This data bank shall be maintained by:
Any body, institute or association, as may be notified by the Central Government,
And it shall be put on the website of the Ministry of Corporate Affairs or any other website as notified.
The data bank shall also provide the details of directors' qualifications and experience.
(2) The responsibility of due diligence before selecting a person from the data bank lies with the company making the appointment.
(3) The Central Government may prescribe the manner and procedure of:
Selection of independent directors,
Maintenance of the data bank.
🔸 Key Points:
Ensures transparency and standardization in appointing independent directors.
Companies must check qualifications and background before appointing.
The Indian Institute of Corporate Affairs (IICA) has been notified to maintain the data bank.
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