Section 184 - mbp-1 form for foreign director

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Querist : Anonymous

Querist : Anonymous (Querist)

19 July 2014 We have incorporated o Joint Venture Company in which 50% shareholder is a Indian Company and 50% shareholder is a German Company. Both the companies has appointed 2-2 directors from their sides without qualifying shares. It means two directors are of Indian origin and balance two directors are of Foreign origin.

As per the provisions of Sec 184 of the New Companies Act, every director shall disclose his interest or concern in the form MBP-1.

Now we have following queries related the disclosure of interest or concern of German directors as below:

(1) Is it necessary to file the MBP-1 for the German Director?
(2) If the answer of the above is yes, then is it necessary to disclose the interest by German Director in the overseas concerns or disclosure of interest only in Indian concern is sufficient.

Further we also want to know that is it compulsory to file MBP-1 for Independent director without shareholding.

Please reply the same with supporting of section or rules of New Companies Act.

Ankur Garg

Ankur Garg (Expert)
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19 July 2014 Hi,

1. German Director is required to file Form MBP.1 and there is no doubt.
2. Position is not very clear in law. However it is advisable to disclose the name of overseas entities in which such German Director is having interest.
3. Filing of form MBP.1 is compulsory for all the Director. So it is also necessary for Independent Director to file form MBP.1

Kindly revert if there is any doubt.

Thanks

Ankur Garg

Ankur Garg (Expert)
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19 July 2014 Disclosure of Interest by Directors under CA, 2013

As per section 184(1) of Companies Act, Every director shall:

(i.) At the first meeting of the Board in which he participates as a director; and thereafter
(ii.) At the first meeting of the Board in every financial year or
(iii.) 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.

Form MBP.1
As per section 184(1) read with rule 9(1) of Companies (Meetings of Board and its Powers) Rules, 2014, Every director shall 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 No. MBP 1.

Requirement of filing form MGT.14 for disclosure of interest by Director

As per Section 117(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 almost established that 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.

Thanks

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Querist : Anonymous

Querist : Anonymous (Querist)

19 July 2014 Thanks for your valuable reply.

This will help us definately

Ankur Garg

Ankur Garg (Expert)
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19 July 2014 You are always welcome and keep sharing your doubts with us through the platform of caclubindia.

Regards