Please find below my point wise opinion w.r.t. the date of form MBP.1:

1. Technically speaking Section-299 and form 24AA was very much there till March 31, 2014 with respect to general disclosure of interest by Directors. Hence to maintain best practice it is advisable to collect disclosure in form 24AA for the financial year 2014-15.

1. From April 01, 2014, Section-184 came into effect and rules prescribe form MBP.1 in place of form 24AA and place requirement to upload form MGT.14 in that regard.

1. Now as far as cut of date is concerned, we should collect revised disclosure for the financial year 2014-15 in form MBP.1 as early as possible. So revised MBP.1 may be collected within a week so any date of first week of April would be fine.

1. Now as per section 184(1), this disclosure needs to be taken note of in the first board meeting of the financial year 2014-15.

For example if the date of first board meeting is April 03, 2014, then MBP.1 may be dated April 01, 2014 or April 02, 2014 or April 03, 2014.

1. Further all the above facts like initial disclosure in form 24AA, revised disclosure in form MBP.1 relevant provision of law should be part of commentary of the resolution passed for taking note of disclosure of interest.

The above information is based on my personal understanding. Kindly wait for the opinion of other members.

Thanks

CS Ankur Garg

Thanks Mr. Amit & Mr. Ankur for your feedback.

@ Mr. Amit: Just to add on your views, for MBP-1 & DIR-8 the Section no where mentions that it is to be taken from KMP as well or on a safer side you suggest to take it from KMP  ? 

Also, DIR-8 should be taken on annual basis or only at the time of appointment ?

Thanks,

Shreya, MBP-1 is required at time of appointment or relinquishment of office of KMP as well. Refer section 189(2).

DIR-8 is required only at the time of appointment or re-appointment.

For my other Corporate Law Articles on Companies Act, 2013, kindly refer the links mentioned below:

1. Useful Interpretations about Companies Act, 2013 - Part-1

1. List of Resolutions to be filed with ROC in Form MGT.14

1. Procedure for Appointment of Additional Director in CA 2013

1. Different Monetary Limits under Companies Act 2013

1. Companies to have Uniform Financial year under CA 2013

Thanks

CS Ankur Garg

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Friends,

I have tried to compile provisions relating to disclosure of interest by directors & KMPs in the form of a table for sake  of  clarity.  Pl give your comments, if any.

Thanks

Dear Sir,

There is Confusion regarding participation of Interested Director in Board Meeting.

There are 3 Directors and Shareholders in Pvt. Ltd. - A, B & C. A- Husband, B - Wife & C - Son.

Mr. A enters in contract with proprietorship firm in which he is Owner. Mr. A has given Disclosure of Interest to the Company regarding this contract.

Now Mr. A can't participate in the Board Meeting as he is Interested Director. B & C are relative of Mr. A and can be deemed as having INDIRECT Interest in the contract.

So, whether B & C can participate in the Meeting and pass the Resolution in meeting?? If No, how to pass this resolution??

Maulik Bhavsar

Respected Sir,

Can you please tell me is there any time limit for giving a notice in writing in Form No. MBP 1.

Thanks Sir for giving us a valuable explanation of the provisions of the Act,
I want to know whether it is necessary to disclose in MBP-1, if a director is only a director in any other company and not holding any shares in that other compnay?

Originally posted by : Saket Tibrewal
	Thanks Sir for giving us a valuable explanation of the provisions of the Act, I want to know whether it is necessary to disclose in MBP-1, if a director is only a director in any other company and not holding any shares in that other compnay?

Yes it is required to be disclosed even if director is not holding any share. Reason being he is having direct interest as he is the  director of that other company.

Thanks

Dear Friends,

With reference to the current thread, I differ with the views expressed by the other experts / members. In my view there is no legal requirement as such to e-file MGT-14 with ROC w.r.t. resolution passed for taking note of Disclosure of Interest in Form MBP.1 u/s 184 of Companies Act, 2013.

Analysis of the relevant sections of the Companies Act, 2013 :

Sec. 184(1) of the CA, 2013 reads as :

“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.”

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.

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.

Sec. 117 (1) reads as :

“117. (1) A copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the Registrar within thirty days of the passing or making thereof in such manner and with such fees as may be prescribed within the time specified under section 403 :

              Provided…………………….”

Sec .117(3) reads as :

“(3) The provisions of this section shall apply to :

1. Special resolutions;
2. ……….
3. ……….
4. ……….
5. ……….
6. ……….
7. resolutions passed in pursuance of sub-section (3) of section 179; and
8. (h) any other resolution or agreement as may be prescribed and placed in the public domain. “

Thus, from the above sections and the language used therein, Sec.117(1) requires  Resolutions, agreements etc. pertaining to matters specified in Sec.117(3) to be filed/reported reported via MGT.14.

Further, Section 117(3) at clause (g) refers to matters given in section 179(3) [as required to be reported via MGT.14.]

Sec. 179(3) of the CA, 2013 reads as :

“3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:—

(a) to make calls on shareholders in respect of money unpaid on their shares;

(b) to authorise buy-back of securities under section 68;

(c) to issue securities, including debentures, whether in or outside India;

(d) to borrow monies;

(e) to invest the funds of the company;

(f) to grant loans or give guarantee or provide security in respect of loans;

(g) to approve financial statement and the Board’s report;

(h) to diversify the business of the company;

(i) to approve amalgamation, merger or reconstruction;

(j) to take over a company or acquire a controlling or substantial stake in another company;

(k) any other matter which may be prescribed.”

It ought to be noted that Sec.179(3) does not contain any provision relating to disclosure of interest by director/s etc.

It also ought to be noted that apparently no other matter has been prescribed/notified pursuant to Sec.179(3)(k) till date.

Now, referring to 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.

Rule 8 of Companies (Meetings of Board and its Powers) Rules, 2014 reads as :

“8. Powers of Board.-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.”

It ought to be noted that there is only a similarity in the provisions as per Sec.179(3) and Rule 8 that powers shall also be exercised by the Board of Directors only by means of resolutions passed at meetings of the Board.

Apart from the above similarity (of exercise of powers only by means of Resolution) there appears to be no relation interse between Sec.179(3) and Rule 8 of Companies (Meetings of Board and its Powers) Rules, 2014.  

There does not appear to be any express provision in the Act or the Rules, requiring filing of Resolutions, agreements etc. pertaining to matters specified in Rule 8(5) to be filed/reported reported via MGT.14. It ought to be noted that matters specified in Rule 8(5) are different from matters specified in Sec.179(3).

From the above discussion, In my view Form MGT-14 is required to be filed only in respect of Resolutions, agreements etc. relating to matters specified in Sec.179(3). There is no such requirement for filing of MGT-14 for Resolutions, agreements etc. relating to matters specified in Rule 8(5) of Companies (Meetings of Board and its Powers) Rules, 2014.

Experts are requested to provide their views on the above issue.

CA.Prashant Munot

My question is that if :

1) Diector holding shares as Karta

2) Relative of Dirctor holding share in company.

3)Relative of Director holding shares as Karta

Then also disclosure need to be given in Form MBP 1 OR not. 

@ Prashant:

Power under Rule 8 are just in addition to powers conferred to Board u/s 179(3) and not separate. They are to be read in conjunction with powers conferred to Board under section 179(3). This is the Rule of Harmonious Construction. Resolutions passed u/s 179(3) are to be filed in MGT-14 – To take note of the disclosure of Director’s interest and shareholding is being one of them. 

Dear Amitji

Yes, what you say is definately one of the view.

1. There is no doubt  that Resolutions passed u/s 179(3) are to be filed in MGT-14.

Ankur Sir, Pls clarify whether disclosure requirement u/s 184(1) is applicable to all the directors even they do not have any interest / do not hold more than 2% shares in any other co. / body corp. as the case may be???