Independent Director Registration

An Independent Director is an outside Director who must safeguard the interest of the company's members. To become an Independent Director certain steps should be followed. Also, an Independent Director must have some qualities to become an Independent Director of a company. In this article, you’ll get complete details related to Independent Director including its qualities, roles & responsibilities and its registration process.

Who is an Independent Director?

An Independent Director or an outside Director is a person who is not connected with the company internally and only safeguard the company's members interest. They only increase the credibility of the company and work as a non-executive director. They work to set the governance standard for the company. To appoint an independent director company needs to follow the provision Under Section 149 of Companies Act, 2013. Also they need to follow Rule 4 & 5 along with Section 149.

Qualities of an Independent Director

To become an Independent Director in any Company, an individual must have some qualities. These qualities includes:

1. Decision Making: An Independent Director must have decision making skills. There are chances of conflict internally in which decision of the Independent Director is required. In that case decision making skills are required.
2. Impartiality: Making a decision for the company must be unbiased which means the Independent Director must be impartial with all the members of the company for better growth and development.
3. Loyalty: An Independent Director must support its company and have the quality of loyalty. He/She must be committed to the company and its value.
4. Professional Repute: An Independent Director must have a professional reputation on which people can trust easily. Trustworthiness can help investors to invest in the Company easily.

Roles & Responsibilities of Independent Director

An Independent Director plays an important role in any company. In a Company independent Directors have certain roles and responsibilities which need to be fulfilled timely. In case of any failure of these responsibilities, the company can suffer from certain losses. These roles and responsibilities of an Independent Director are as follow:

1. Independent Judgment: An Independent Director plays a crucial role in judging various fields including strategy, performance, risk management, resources, appointment, key management, etc. The judgment for all these roles should be perfect for the betterment of the organisation.
2. Setting up the Objective: Another important responsibility which needs to be completed by the Independent Director is Setting up the objective. The objective of any company is the main key advantages which plan where the company will move further. Also, Setting up the objective helps in assigning the duties to each member of the company.
3. Examine the Performance: Next, an Independent Director used to examine the performance of each individual working within the company. It is important to keep an eye on each task assigned to members of the company if they are meeting up the deadlines or not.
4. Safeguard the Interest: Another role of an Independent Director is to make sure if the interest of an individual is kept within the company. Safeguarding the interest of all the stakeholders is important especially when it comes to the minority stakeholders who can lose interest easily.
5. Balance Conflict: An Independent Director must keep a balance within the company. In case of any conflict within the company, it is the responsibility of an independent director to settle down the conflict calmly and impartially.

Registration Process of Independent Director

To appoint an Independent Director of a Company, certain major steps should be followed as per the Section 149 of the Companies Act, 2013. Following is the detailed process of appointing an Independent Director:

• Step 01: Login to MCA Portal: In order to register for Independent Director, login to MCA Portal and enter the required credentials.
• Step 02: Enter Required Detail: Once you login Go to MCA Services > Datebank Service > Individual Registration. Then enter the required detail either your DIN or PAN and you’ll get one OTP generated on your mobile number which is linked with you DIN/PAN. Once you enter the OTP you’ll get your ID & Password.
• Step 03: Login for Director Databank: Once you get the login ID & Password, login at Independent Director Databank by using the same ID & Password. Fillup the required details and submit the form.
• Step 04: Fee Payment: Once you submit the form, pay the required fees for the submission. The Name will be included in Independent Director Data Bank, As per Rule 6(4) of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, every individual whose name is included in the databank under sub rule (1) shall pass an online proficiency self-assessment test conducted by the institute within a period of two years from the date of inclusion of his name in the databank, failing which, his name shall stand removed from the databank of the institute. This is subject to exemption allowed under the rule for individuals meeting the required experience criteria.

Why Bizfoc?

Bizfoc has its expertise, efficiency, and commitment to providing a smooth registration process for an Independent Director. They have a team of experienced professionals who make sure that they comply with all legal requirements for Independent Director Registration. We offer quick process, transparent pricing for your Independent Director Registration. Whether you need help with document preparation, compliance filings, or regulatory updates, Bizfoc is your trusted partner for hassle-free Independent Director Registration.

Frequently Asked Questions (FAQs)