Mr A was interested in a contract He was a Director of A Ltd The interest was not disclosed On prosp...........

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

Mr. A was interested in a contract. He was a Director of A.Ltd. The interest was not disclosed. On prospective discovery of his interest the Director, the BOD wanted to annul the contract.

Can it do so?

Yes, the contract is voidable at the option of the Company

Yes, the contract is voidable by the party in which the Director has interest, failing which the Director shall indemnify

No, the contract cannot be voided on a technicality and the outsiders are protected by Doctrine of Indoor Management

Yes, the contract is voidable and the Company shall bear all costs that may have unduly befallen on the other party as a result of voiding

छोटे Courses बड़े Results

Master Board-powersandMeetings

Prepare through Micro-courses

Try Now

Explanation:

Disclosure of interest Sec 184 (3)

A contract or arrangement entered into by the company without disclosure under sub-section (2) or with participation by a director who is concerned or interested in any way, directly or indirectly, in the contract or arrangement, shall be voidable at the option of the company.