Clarification relating to Section 184

[CS Alpesh Dhandhlya]

Dear Learned Members

Section 184 provides that the disclosure of his  interest or concern of in any Company etc. .... 

and Form MBP 1 also provides as above; 

Hence, please help me regarding the whether the disclosure is required to be taken only of Director/s or also his relative as that was the situation in Section 299 of CA, 1956 ?

[Rakhi Singh]

as per my best knowledge Directors and there relative...because in section the word is direct or indirect is added.

other views are most welcome 

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Thanks & Regards,

 Rakhi Singh

Company Secretary

NKG Infrastructure Limited

CIN-U74899DL1989PLC038371

Tel-+91-11-23413731

Fax-+91-120-4537458

Mob# - +919990664838

[CS Prabhat Joshi]

Dear Alpesh,

Disclosures should be taken from Director. Directors disclosures should include their relatives details and relatives interests.

(Ref sec 184 read with sec 2(49) of the CA 2013)

Other members can correct me if I am wrong.

Prabhat Joshi

Thanks & Regards

 

 Prabhat Joshi

[CS Alpesh Dhandhlya]

Dear Mr. Singh

Sub section (1) of Section 184 and Rule 9 (1) of Chapter XII does not contain the word '' directly or indirectly'' 

Please verify 

[Deepesh Nayak]

Disclosure shall be given by director intimating his / her interest or concern in other entity, whether directly or indirectly. Indirectly means through relatives, KMP, etc.

Only one MBP 1 form is required to be taken from director and not from each. However, MBP 1 should properly prepared so that we can easily identified the interest of director and his relatives.

Regards,
Deepesh

Thanking you,

*CS Deepesh Kumar Nayak*
 Company Secretary

 *Mob. 097134-80215*
*csdeepe...@gmail.com*

[Rakhi Singh]

Dear,

See section 184(2)

184. (1) Every director shall at the first meeting of the Board in which he participates as

a director and thereafter at the first meeting of the Board in every financial year or 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.

(2) Every director of a company who is in any way, whether directly or indirectly,

concerned or interested in a contract or arrangement or proposed contract or arrangement

entered into or to be entered into—

[CS Alpesh Dhandhlya]

Dear Members

List of relatives shall be as per the Section 2 (77) and Rule 4 of the Chapter I.

Please correct me, if I am wrong ;

[Rakhi Singh]

yes

Sec 2(77) of the Companies Act, 2013 read with Rule 4 of Companies (Specification of definitions details) Rules, 2014 defines RELATIVE.

 

The list is as follows:

1.     Members of HUF

2.     Husband & Wife

3.     Father (Provided that the term “Father” includes step-father) 

4.     Mother (Provided that the term “Mother” includes the step-mother)

5.     Son (Provided that the term “Son” includes the step-son)

6.     Son’s wife.

7.     Daughter.

8.     Daughter’s husband. 

9.     Brother (Provided that the term “Brother” includes the step-brother) 

10.  Sister (Provided that the term “Sister” includes the step-sister) 

[Deepesh Nayak]

Both of you are right.

Regards,

Deepesh

Thanking you,

*CS Deepesh Kumar Nayak*
 Company Secretary

 *Mob. 097134-80215*
*csdeepe...@gmail.com*

[Bharti Ahuja]

I share a contrary opinion on general disclosure required as per the provisions of Section 184(1). If you closely read section 184(1) read with rule 9, it states, directors concern or interest (general). it doesn't talk about his relatives interest disclosure.

Section 184(2)- specific disclosure- states that direct or indirect interest is required to be disclosed in contract or arrangements/ proposed contract or arrangement - at this stage while entering into proposed contract or arrangement I suspect, relatives disclosure needs to be made.

Also MBP 1 is for general disclosure ( under section 184(1)].  No specific form for disclosure under 184(2) is prescribed so in my view this needs to be simply recorded in minutes

Others views are solicited. 

Best Regards,

Bharti Ahuja

[Mohit Mahana]

Correctly stated by Bharti!

Regards,

CS Mohit Mahana

[Rakhi Singh]

Kindly read points given below:

Disclosure of interest and appointment of secretarial auditor

 

According to Section 184 of The Companies Act 2013 (herein after referred to as an “Act”) every director is required to 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.

 

Every director shall at the first meeting of the Board in which he participates as a director and thereafter at the first meeting of the Board in every financial year or 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,

 

According to Section 179 (3) The Board of Directors of a company shall exercise the powers defined in sub clause (a) to (k) on behalf of the company by means of resolutions passed at meetings of the Board.

According to Rule 8 of Companies (Meetings of Board and its Powers) Rules, 2014 In addition to the powers specified under sub-section (3) of section 179 of the Act, the following powers shall also be exercised by the Board of Directors only by means of resolutions passed at meetings of the Board.

 

(1) to make political contributions;

(2) to appoint or remove key managerial personnel (KMP);

(3) to take note of appointment(s) or removal(s) of one level below the Key Management Personnel;

(4) to appoint internal auditors and secretarial auditor;

(5) to take note of the disclosure of director’s interest and shareholding;

(6) to buy, sell investments held by the company (other than trade investments), constituting five percent or

more of the paid up share capital and free reserves of the investee company;

(7) to invite or accept or renew public deposits and related matters;

(8) to review or change the terms and conditions of public deposit;

(9) to approve quarterly, half yearly and annual financial statements or financial results as the case may be.

 

According to Section 117(3) (g) of the Act resolutions passed in the sub section (3) of section 179 shall be filed with Registrar within 30 days of passing the resolution in Form MGT -14.

 

If a director of the company contravenes the provisions of section 184 of the Act then such director shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to one lakh rupees, or with both AND

 

Director shall vacant his office under section 167(1) and as per sub section 2 he shall also be punishable with -Imprisonment up to 1 year or Fine shall not be less than one Lack and may be extend up to 5 Lakh Rupees or Both

 

 

Thus it is necessary for all the companies to obtain declaration in Form MBP 1 from all its directors and has to file the same with MCA in form MGT 14 within 30 days of the first board meeting in the financial year.

 

[Deepesh Nayak]

Ms. Bharti only one form MBP 1, whether it is annually or eventually, is required from the director and not from his relatives.



Regards,
Deepesh

Thanking you,

*CS Deepesh Kumar Nayak*
 Company Secretary

 *Mob. 097134-80215*
*csdeepe...@gmail.com*

[Bharti Ahuja]

Hi Deepesh,

If you check form MBP-1, it indicates Pursuant to section 184(1) read with rule 9. Therefore, I believe no specific format for 184(2) disclosure, ( this is similar to 299(2) of previous act) only noting in the minutes of such disclosure would be required

[CS Alpesh Dhandhlya]

Dear Deepesh bhai

It is required in the first BM of each year in which he participates & when there is any changes therein then in the immediate next BM, after such a change occurs... 

[Deepesh Nayak]

Then what i said.???

Please read both sub-sections connecting to each other. Without giving any disclosure, how board can take note of it.

Thanking you,

*CS Deepesh Kumar Nayak*
 Company Secretary

 *Mob. 097134-80215*
*csdeepe...@gmail.com*

[BINDU MADHAVA]

Even section 184(1) itself is clear that any change in interest needs to be disclosed

In other words any contracts in which director is interested indirectly also needs to be disclosed.

regards
Bindu Madhava K G

[jayesh shah]

Dear All Member,

What if we have been given disclosure of interest by our directors for the F.Y. 2014-15 on or before 31st March in the old format (i.e. 24AA) as per CA,1956, do we once again need disclosure in new format MBP-1 and file the same with MCA as per NCA, 2013.

Please Give your valuable Answer of my above queries.

Warm Regards

Jayesh Shah

[csru...@gmail.com]

Yes at d first BM as per 164 and 184

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From: jayesh shah <jayesh...@gmail.com>

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Date: Mon, 19 May 2014 05:37:23 -0700 (PDT)

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ReplyTo: csmy...@googlegroups.com

Subject: Re: [CSMysore] Clarification relating to Section 184

[CS Alpesh Dhandhlya]

Yes you need to take the disclosure but it is not needed to be filed with ROC. 

[csyogan .]

what has to be disclosed is the question that is roaming around. if even a single share is to be disclosed (might look logical in few cases), then a director who normally trades on stock markets has to give one mbp-1 every day... isnt it ?

regards,
yogan.