Disclosure of Interest by Directors under Companies Act, 2013

The role of directors have been greatly enhanced by the Companies Act, 2013. The new Act, has made it mandatory for every director to disclose his interest in company or companies or body corporate, firms, or other association of individuals, including their shareholding, in such manner as may be prescribed. As per section 184(1) of Companies Act, Every director shall:  

  1. At the first meeting of the Board in which he participates as a director; and thereafter
  2.  At the first meeting of the Board in every financial year or
  3. Whenever there is any change in the disclosures already made, then at the first Board meeting held after such change, disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals which shall include the shareholding, in such manner as may be prescribed.  we

  Such disclosure has to be made in Form MBP-1 and filed with the ROC in Form MGT-14 .As per Section117(1), certain resolutions and agreements as required by section 117(3) are required to be submitted with ROC through filing form MGT.14. Section 117(3) also refers matter given in section 179(3) are also required to be reported via MGT.14.As per section 179(3)(k) read with rule 8(5) of Companies (Meetings of Board and its Powers) Rules, 2014, taking note of the disclosure of director’s interest and shareholding shall be done by the Board only by means of resolutions passed at meetings of the Board. Hence it is duty of the company to pass board resolution to take note of disclosure of interest by Director and file a copy of that board resolution in MGT.14. within 30 days of passing board resolution. Now it is a matter of discussion that whether form MBP.1 regarding disclosure of director’s interest is also required to be attached through form MGT.14 along with copy of resolution passed u/s 184(1). As per my opinion there is no harm in attaching form MBP.1 with MGT.14 along with copy of board resolution though there is no compulsion as far as language of form MGT.14 is concerned.   Please click to more on Company Regsitration