Provisions Relating To Disclosure Of Interest Under Companies Act, 2013

PC Agrawal

We are uploading herewith a chart showing provisions relating to disclosure of interest by directors and Key Managerial Persons (KMPs) under section 184(1), 184(2), 189(2) of Companies Act, 2013 read with Rules 9 & 16 of Chapter XII – The Companies (Meetings of Board and its Powers) Rules, 2014 at a glance which could be useful to all.

Download Chart of provisions relating to disclosure of interest

Extract of Rule -9

9. Disclosures by a director of his interest.-(1) Every director shall disclose his concern or interest in any company or companies or bodies corporate (including shareholding interest), firms or other association of individuals, by giving a notice in writing in Form MBP 1.

(2) It shall be the duty of the director giving notice of interest to cause it to be disclosed at the meeting held immediately after the date of the notice.

(3) All notices shall be kept at the registered office and such notices shall be preserved for a period of eight years from the end of the financial year to which it relates and shall be kept in the custody of the company secretary of the company or any other person authorised by the Board for the purpose.

Extract of Rule -16

16. Register of contracts or arrangements in which directors are interested.—(1) Every company shall maintain one or more registers in Form MBP 4, and shall enter therein the particulars of—

(a) company or companies or bodies corporate, firms or other association of individuals, in which any director has any concern or interest, as mentioned under sub-section (1) of section 184:

Provided that the particulars of the company or companies or bodies corporate in which a director himself together with any other director holds two percent or less of the paid-up share capital would not be required to be entered in the register;

(b) contracts or arrangements with a body corporate or firm or other entity as mentioned under sub-section (2) of section 184, in which any director is, directly or indirectly, concerned or interested; and

(c) contracts or arrangements with a related party with respect to transactions to which section 188 applies.

(2) The entries in the register shall be made at once, whenever there is a cause to make entry, in chronological order and shall be authenticated by the company secretary of the company or by any other person authorised by the Board for the purpose.

(3) The register shall be kept at the registered office of the company and the register shall be preserved permanently and shall be kept in the custody of the company secretary of the company or any other person authorised by the Board for the purpose.

(4) The company shall provide extracts from such register to a member of the company on his request, within

seven days from the date on which such request is made upon the payment of such fee as may be specified in the

articles of the company but not exceeding ten rupees per page.