Mr A Director of A Ltd is also the partner in Alpha Traders Alpha Traders is expecting to receive an...........

Companies Act-Phase (I & II) Board-powersandMeetings

Mr A. Director of A.Ltd is also the partner in Alpha Traders. Alpha Traders is expecting to receive an order from A Ltd. The BM convened to grant this order has Mr. A present thereat. As an Interested Director can he participate?

Yes, as an interested director is required not to vote only if he is a “Director “ in benefiting “Company”

Yes, but only on disclosing interest

No, Interested Directors are not allowed to vote in matters pertaining to outside entities where they are owners.

Yes, but such action shall be ratified by Indepedent Directors’ Committee

छोटे Courses बड़े Results

Master Board-powersandMeetings

Prepare through Micro-courses

Try Now

Explanation:

This section applies to any contract or arrangement entered or to be entered into between two companies where any of the directors of the one or both company or more of them together hold(s) more than two per cent. of the paid-up share capital in the other company.

In other words, Section 184 is applicable to every director of a company, whether directly or indirectly, concerned or interested in a contract or arrangement or proposed contract or arrangement entered or to be entered into:

(a) In case of a body corporate –

(i) If such director or such director in association with any other director, holds more than two per cent. shareholding of that body corporate; or

(ii) If such director is a promoter, manager, Chief Executive Officer of that body corporate;

(b) In case of a firm or other entity –

(i) If such director is a partner, owner or member, as the case may be.

However, this section does not override any of the rules of law made for restricting the director of the Company from having any concern or interest in any contract or arrangement with the Company.