A Comprehensive Guide to Independent Director Registration

The Independent Directors Databank is an initiative of the Ministry of Corporate Affairs for the capacity building of the existing Independent Directors, in order to inculcate the high standards of Corporate Governance in India. The Databank is a key instrument to enable Independent Directors to become “Agents of Change” on the corporate boards. The databank has been developed in accordance with the provisions of the Companies Act 2013 as mentioned below:

Section 150 of the Companies Act, 2013 provides that “an independent director can be selected from a data bank maintained by any-body, institute or association, as may be notified by the Central Government. The data bank would contain names, addresses and qualifications of persons who are eligible and willing to act as independent directors. The company needs to ensure exercise of due diligence before selecting an independent director from the data bank”.

On 22nd October 2019, the Ministry of Corporate Affairs (MCA) notified the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019 and amended the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019.

Step 1: Obtain a Digital Signature Certificate (DSC) (If Not Already Available)

A Class 3 DSC is required to apply for a DIN (Director Identification Number) and to file necessary forms electronically with the MCA.

Documents Required for DSC Application:

• PAN Card (Mandatory for Indian citizens)

• Aadhaar Card / Passport (for Address Proof)

• Passport-sized Photograph

• Mobile number & Email ID (for OTP verification)

• Self-attested copies of the above documents

• DSC Application Form (Signed and attested as per Certifying Authority’s requirement)

  
  

Process:

1. Choose a Certifying Authority (CA) (eMudhra, Sify, VSign, etc.).

2. Fill out the DSC application form online and upload the documents.

3. Complete the video verification & eKYC process (as per the CA’s procedure).

4. Upon verification, the DSC will be issued (usually in 1-2 working days).

   
   

Is it mandatory to obtain DIN for registering as ID?

No, DIN (Director Identification Number) is not mandatory for registering on the Independent Directors’ Databank.

Key Points on DIN Requirement:

• You can register on the Independent Directors' Databank without a DIN.

• Instead of a DIN, you can register using your PAN (for Indian citizens) or Passport number (for foreign nationals).

• However, if you later wish to be appointed as an Independent Director in a company, you must obtain a DINbefore such an appointment.

Step 2: Apply for Director Identification Number (DIN) (If Not Already Available)

If you do not have a DIN, you need to apply via SPICe+ (for new company incorporation) or Form DIR-3 (for appointment in an existing company).

Documents Required for DIN Application:

• DSC of the Applicant

• PAN Card (Self-attested)

• Address Proof (Aadhaar/Passport/Voter ID/Utility Bill – not older than 2 months)

• Declaration in Form DIR-3 (Self-attested)

• Board Resolution from the Company (if applying through an existing company)

  
  

Process:

1. Login to the MCA Portal (https://www.mca.gov.in/).

2. Select Form DIR-3 and fill in personal details.

3. Attach required documents & digitally sign with DSC.

4. Pay the fee (₹500).

5. MCA will verify and approve the application, issuing the DIN (typically within 1-2 working days).

Step 3: Register on MCA

Every person intending to be an Independent Director must register on the MCA first and create User login & password.

Process:

1. Visit MCA

2. Click on “MCA Services” and then “ID Databank services”.

3. Select ‘Individual Registration’.

4. Enter either DIN or PAN or Passport.

5. Verify Email & Phone details given through OTP.

6. An email will be received containing Username & Password for empanelment with Independent Directors Databank.

Step 4 : Register on Independent Directors' Databank

Every person intending to be an Independent Director must register on the MCA-approved Databank managed by the Indian Institute of Corporate Affairs (IICA).

Process:

1. Visit Independent Directors' Databank.

2. Enter Login credentials as received on mail in the previous step & login.

3. Change password.

4. Click on “Empanel” and fill in the required details:

   • Personal Details: Name, DOB, PAN, DIN, Email, Mobile Number.

   • Educational : Graduation, Post-graduation, Training details year-wise.

   • Professional Details: Qualification, Experience, Industry expertise.

   • Positions : Positions held as Director, KMP, Professional in various Organisations year-wise.

   • Declarations : Regarding matters & visibilty.

   • Review : Review all details filled.

5. Choose Subscription Plan & pay fees :

6. Validity of 1 year : ₹5,000 + 18% GST = ₹5900

7. Validity of 5 years : ₹15,000 + 18% GST = ₹17700

8. Validity of Lifetime : ₹25,000 + 18% GST = ₹29500

Step 4: Pass the Online Proficiency Self-Assessment Test (Mandatory in Some Cases)

New Independent Directors (without certain qualifications or experience) must pass an online proficiency test conducted by the IICA within 2 years from the date of registration.

Exceptions :

Provided that an individual shall not be required to pass the online proficiency self-assessment test when he has served for a total period of not less than three years as on the date of inclusion of his name in the data bank:

1. as a director or key managerial personnel as on the date of inclusion of his name in the databank, in one or more of the following, namely:

   1. listed public company; or

   2. unlisted public company having a paid-up share capital of rupees ten crore or more; or

   3. body corporate listed on any recognized stock exchange or in a country which is a member State of the Financial Action Task Force on Money Laundering and the regulator of the securities market in such member State is a member of the International Organization of Securities Commissions; or

   4. bodies corporate incorporated outside India having a paid-up share capital of US$ 2 million or more; or

   5. statutory corporations set up under an Act of Parliament or any State Legislature carrying on commercial activities; or

2. in the pay scale of Director or equivalent or above in any Ministry or Department, of the Central Government or any State Government, and having experience in handling,-

   1. the matters relating to commerce, corporate affairs, finance, industry or public enterprises; or

   2. the affairs related to Government companies or statutory corporations set up under an Act of Parliament or any State Act and carrying on commercial activities.

3. in the pay scale of Chief General Manager or above in the Securities and Exchange Board or the Reserve Bank of India or the Insurance Regulatory and Development Authority of India or the Pension Fund Regulatory and Development Authority and having experience in handling the matters relating to corporate laws or securities laws or economic laws

4. Provided also that the following individuals, who are or have been, for at least ten years:-

5. an advocate of a court; or

6. in practice as a chartered accountant; or

7. in practice as a cost accountant; or

8. in practice as a company secretary

shall not be required to pass the online proficiency self-assessment test.

Test Details:

• Mode: Online, MCQ-based.

• Syllabus:

  • Companies Act, 2013

  • Corporate Governance

  • Securities Laws

  • Other Business & Financial Regulations

• Passing Criteria: 50% marks.

• No limit on attempts within 2 years of registration.

Step 5: Obtain Appointment in a Company as an Independent Director

Once you are registered and (if required) have passed the test, you can be appointed as an Independent Director in a company through:

1. Company’s Board Resolution approving the appointment.

2. Filing Form DIR-12 with the MCA (within 30 days of appointment).

3. Submission of Form MBP-1 (Disclosure of Interest) to the company.

4. Inclusion in the Board's Register of Directors and Key Managerial Personnel (KMPs).

   
   

Step 6: Regular Renewal and Compliance

1. Renew Registration on IICA Databank (if opted for 1-year or 5-year plan).

2. Annual Disclosure to Companies where you hold an Independent Director position (about eligibility & compliance).

3. Ensure DIN KYC Filing (DIR-3 KYC) every year before September 30 to keep the DIN active.

   
   

Step 7 : Services of Independent Director Data Bank

Once the individual registered with the data bank, the following services can be availed:

• Online Courses

• Self-assessment

• Corporate Access to Data Bank

  
  

Online Courses

The online courses aim to refresh the basic knowledge base and enhance the efficiency of Non-Executive Directors. Participants will be trained more focused in their pursuit of knowledge. Through online courses, the MCA trying to build an effective company board by providing awareness of corporate governance. Courses are divided into 2 categories – Board Essentials Courses and Board Practice Courses.

Self-Assessment Tests

• Every individual who is included in the databank should undergo an Online Proficiency Self-Assessment test which will be conducted by IICA. The individual should clear the assessment within one year from the date of inclusion of his name in the databank. If the director failed in the assessment, the name of the director shall be removed from this databank.

• If an individual served as director for a minimum of ten years as on the date of inclusion of name in the databank as director or key managerial personnel (KMP) in a listed or an unlisted public company with a paid-up share capital of Rs.10 crore or more shall not be required to pass the online proficiency self-assessment test:

  • The purpose of calculation of the period of ten years referred to in the first proviso, a period during which an individual was acting as a director or as a KMP in two or more companies at the same time period shall be counted only once.

  • An individual has to score a minimum of 60% in the online proficiency self-assessment test to declare as PASS.

  • There is no limit for the number of attempts to clear the online proficiency self-assessment test.

    
    

Corporate Access to Data Bank

The databank of independent directors contains names, addresses, and qualifications of persons who are eligible and willing to act as Independent Directors. This Databank aims to provide single-point access to the companies to search Independent Directors as per their needs.

The companies can download the profiles of Independent Directors by the below steps:

• Viewing the Summarized profiles

• Add Shortlisted profile to the cart

• Click checkout option

• Paying the fee through payment gateway

• Detailed profile of Independent Directors can be downloaded

However, as per the latest notification on 28th February 2020, the directors does not need to undergo proficient self-assessment test for directors who serve a minimum of 10 years as on the date of inclusion in the database for a listed public company or unlisted company with a paid-up capital of minimum of ten crore or the corporate body listed in any of the stock exchange in India.