Mr Good a Director of A Ltd Has developed an interest in a previously approved contract which at the...........

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

Mr. Good a Director of A. Ltd. Has developed an interest in a previously approved contract which at the time of approval he was not interested in. The Director is of the opinion that he is not liable to any further reporting duty since he has disclosed interest at the time of original approval. But the BOD takes a contrary view. Who is correct?

Mr. Good is correct as his view is similar to the Companies Act, 2013

BOD’s view is correct as any change in the interest is to be disclosed forthwith or at earliest next BM

Mr. Good is required to disclose the interest only once he has made any financial gains, mere gaining of an interest doesn’t require disclosure

BOD’s view is correct only if Mr. Good had voted in favour of the interested party in the original resolution

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Explanation:

Section 184(1) of Companies Act, 2013

(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.