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Section 184 of the Companies Act, deals with the Disclosure of Interest by Directors. The main purpose of this section is to bring to the notice that the Director is having interest in other entity. If the Company entering into any contract or arrangement and any of the directors is interested in such contract or arrangement then it is required to submit the disclosure from the director.
As per Section 184(1) of the Companies Act, 2013 every Director of the Company is required to disclose his concern or interest having in any body Corporate, firms or association of individual which shall include the shareholding in the prescribed format prescribed by the Act at the end of every Financial year.
As per section 184(2) of the Companies Act, 2013 every director of a Company who is any way directly or indirectly concerned or interested in a contract or arrangement or in proposed contract or arrangement entered with any body corporate or with firm or with any other entity, then such director is required to give the disclosure.
Yes, as per the Companies Act, 2013 there is form MBP-1 which need to be submitted by the Director for disclosing his interest.
As per section 184(2) of the Companies Act, 2013, a director of the Company who is any way directly or indirectly concerned or interested in a contract or arrangement entered into or to be entered into:
Then it shall be the duty of Director to disclose the notice of his interest.
Disclosure is required to be given by the Director under the following circumstances;
Yes, as per Section 189 of the Companies Act, 2013 relates to “Register of Contract or arrangement in which Directors are Interested”. Every Company is required to maintain the register separately and mentioned the details accordingly as prescribed in the Act.
The particulars are required to mention under Register of Contract in which the Director is concerned or interested are as under:
Also, Read All You Must Know About E Contracts.
Contract or arrangement entered into by the Company without receiving the disclosure of interest by the Director who is concerned or interested directly or indirectly in the contract or arrangement, then it shall be voidable at the option of the Company.
FORM MBP – 1
Notice of interest by director
[Pursuant to section 184 (1) and rule 9(1)]
The Board of Directors
XYZ PRIVATE LIMITED
I, __________________son/daughter/spouse of _________________, resident of ______________________________________________, being a director in the company hereby give notice of my interest or concern in the following company or companies, bodies corporate, firms or other association of individuals:-
|Sr. No.||Names of the /bodies corporate/ firms/ association of individuals||Nature of interest or concern / Change in interest or concern||Shareholding||Date on which interest or concern arose / changed|
If a Director of the Company contravenes the provision, then the Director shall be punishable with the following:
It is the duty of every Director who is holding the Directorship at the end of the financial year in the Company required to submit in the Board Meeting of the Company the disclosure of interest having in any other entity. Further specific Disclosure will be required by the Director as and when applicable. If the Director contravenes the provision, then the penalty will be levied on the Director as prescribed in the Act.