Disclosure of Interest (MGT-14) _Loophole

[Neha Jain]

Hello Everyone....!!!!

Observation:

Section 184 of NCA 2013 - Disclosure of Interest

Section 179 of NCA 2013- Powers of Board

 Then, Section 179(3)(k) -  any other matter which may be prescribed

  

  Now, Matters prescribed in -

  Chapter 12 Rule (8) - Powers of Board

  (5) to take note of the disclosure of director's interest and shareholding in the format of MBP-1

Accordingly resolutions and agreements to be filed u/s 117 of NCA in eform MGT-14.

Now , the attachment of MGT-14 requires :

- Copy of board resolution along with explanatory statement, if any 

- Altered MoA and AoA.

My query is :

- Company need not file MBP-1 as an attachment with any of the eform?

 

- Whenever there is any change in the disclosures(General Disclosures) already made by the Director, then Director again disclose (Specific Disclosure) his concern or interest in any Company ?

- Being a private company if i am not taking any disclosure in the format of MBP-1 from the Directors and simply pass a board resolution for taking of note of DOI by the Directors then in this situation there is no penalty arises on the Director as per Sec 184(4).

- Its just a matter of earning revenue by the Ministry as everytime whenever any changes occured in the Directorships and shareholding of Directors then all other Companies have to file MGT-14 for the same.

LIABILITY ON THE COMPANIES ONLY.

- According to MGT-14 is of no use for disclosure of Interest as the main evidence  MBP-1 is not reqiured in that form. As it only requires board resolution.

Kindly give your valuable views on the same subject matter.

Neha Jain

CS, LL.B, B.Com

[Ankita Sati]

I completely agree with you Neha....there is a loophole in the MGT-14 ,we need not required to file MBP-1 in the MGT-14 the board Resolution is enough but its not solve the purpose of law

But as i think MCA did not give the MBP-1 as a attachment in the form MGT-14 because we file MGT-14 for many purposes and they cannot demand for each and every section attachment.

Regards,

Ankita Sati

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Thanks & Regards

Ankita Sati

[Neha Jain]

Thanx Ankita for your valuable views. Completely agree with your point.

But according to my observation - Ministry should give clarifications on same. As I think it is of no use if we didnot attach MBP-1 in MGT-14.  As there is no transparency on the same.

Moreover, everytime every Company needs to file MGT-14 whenever any changes happened with the Director. Its a liabilty on the part of Companies to file forms everytime for their Directors. 

Neha Jain

CS, LL.B, B.Com

[Ankita Sati]

I agree with you Neha but till the MCA not give any clarification on the same majority of the companies take the benefit of this loophole and file just the board resolution. 

[Neha Jain]

But Ankita...i have to conduct my first Board Meeting for the Financial Year and accordingly I have to make Disclosure of Interest of my all the Directors.

Neha Jain

CS, LL.B, B.Com

[Ankita Sati]

You can take the MBP-1 from your directors and put the matter in the Board Meeting accordingly and at the time of file MGT-14 you also attached the signed MBP forms of directors of your company along with the Board Resolution.

The point is to send the MBP form with MGT-14 or not.It is the matter of your own choice.