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Disclosure of interest by director U/s 184 of Companies Act, 2013

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Online Query

CA Final Student

120 Points Joined August 2019

Whether under section 184 of companies Act, 2013 disclosure of interest (in contact or arrangment) in beginning of every FY is mandatory if interest is less than 2%.

Replies (3)

Chirag

Professional

1979 Points Joined December 2017

No, It's not required, If interest is lesser than 2% of paid up capital, But note that, Once the interest is disclosed, any changes to be mandatorily disclosed in the board meeting held thereafter..

CS MOHIT SALUJA

PRACTICING CS Jalandhar 9914558709

5155 Points Joined April 2010

Better to give disclosure of interest to avoid any problem in future and for better compliances

You can have resolution for the same at www.corporatedrafting.com by following link at https://corporatedrafting.com/product/interest-in-other-entities-3/

For purpose of section 184(2) of the Companies Act 2013, every Director who is interested in any contract or arrangement or proposed contract or arrangement in body corporate in which such director holds more than 2 percent of the total shareholding of the body corporate, then such director shall disclose his nature of interest in which contract or arrangement is discussed but shall not participate in the meeting.

But if the Director is holding less than 2 percent of the amount of the paid up share capital, there is no need to give disclosure in form MBP 1