Disclosure of Interest by Directors
Ministry of Corporate Affairs has notified that from April 01, 2014 an interested Director has to disclose his interest at the first meeting of the Board of Directors ('BOD') of a company and also at the first meeting of the BOD in every financial year. In case there is any change in disclosures made earlier, then the disclosure must be made at the first meeting of BOD held after such change.
An interested director is one who holds, either singly or jointly with other Directors more than 2 per cent of the paid up share capital of a body corporate with whom a contract or arrangement is being entered into by the company or if such Director is the promoter, manager or CEO of such body corporate or where such Director is a Partner, owner or member of a firm with whom any contract or arrangement is being entered into.
In case of any contravention, the director shall be punishable with imprisonment for a term which may extend to 1 year or fine of not less than INR 50,000 but which may extend upto INR 100,000 or both.
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