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Section 299

Charu Srivastava (Company Secretary) (4210 Points)

16 November 2011

Dear All,

I have a query regarding Sub-Section 3 (a) of Section 299 (Disclosure of Interest by Director) of the Companies Act, 1956 which says a a general notice given to the Board by a director, to the effect that he is a director or a member of a specified body corporate or is a member of a specified firm...etc..

What does member of a specified body corporate means? Does it mean:- if a Director is a shareholder of any company , is he required to disclose about name of the Company in form 24 AA ???

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9 Replies

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 16 November 2011

Yes, under section 299 directors are required to disclose their interest in other Companies as Director or Shareholders in general notice in the last month of the financial year.

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sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 16 November 2011

Mr Srivastava sir

One Question

Director discloses his interest as director in other Companies is fine I think is it for the reason for sec 253 i.e he cannot be a director in more than 15 companies

But why director should disclose himself as share holder in other companies may i know a little bit more

I am not an expert like You but have an inclination to learn please reply

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 16 November 2011

Dear Sivaram,

It is for the disclosure of interest of director in other body corporates. So that if the company enter into contract to those companies, it should be in the notice of company and other directors that Mr...... has interest by way of director or shareholder in that company, he may get befifit with that contract. This is the basic concept of disclosure of interest by way of general notice.

Under general notice Directors inform to the company that i have interest in the following companies and if the comapny enter into any contract with those companies i will be treatd interested and the notice shall be treated as sufficient disclosure of the interest.

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