MCA applies restriction on person of other country sharing border with India wanting to be appointed as director
MCA has vide notification Dt. 01.06.2022 applied restriction on an individual seeking appointment as director in an Indian company and is a national of a country which is sharing borders with India. Under the restriction such person needs security clearance from Ministry of Home Affairs.
Similar restriction shall apply when a person tries to apply for DIN number.
Thus, Ministry of Corporate Affairs is trying to put restrictions on person from neighboring country on being appointed as a director of an Indian company and having decisive power.
Relevant extract of the notification are as under:
“(1) These rules may be called the Companies (Appointment and Qualification of Directors) Amendment Rules, 2022.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Appointment and Qualification of Directors) Rules, 2014, ―
(i) in rule 8, after the proviso, the following proviso shall be inserted, namely:-
“Provided further that in case the person seeking appointment is a national of a country which shares land border with India, necessary security clearance from the Ministry of Home Affairs, Government of India shall also be attached alongwith the consent.”;
(ii) in rule 10, in sub-rule (1), the following proviso shall be inserted, namely: –
“Provided that no application number shall be generated in case of the person applying for Director Identification Number is a national of a country which shares land border with India, unless necessary security clearance from the Ministry of Home Affairs, Government of India has been attached alongwith application for Director Identification Number.”.
(iii) in the Annexure, –
(A) in Form DIR-2, under the heading Declaration, the existing paragraph, shall be numbered as paragraph (i) thereof and after the paragraph (i) as so numbered, the following shall be inserted, namely:-
“(ii) I further declare that –
I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director; or I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director and the same has been obtained and is attached. ”;
(B) in FORM NO. DIR-3, under the heading Verification, after serial number 3, the following serial number shall be inserted, namely:-
“3A. I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number; or
I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number and the same has been obtained and is attached. ; and ”
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