Section 184 requires the disclosure of interest by a director
Purpose: The purpose of Section 184 is to ensure transparency and prevent conflicts of interest by requiring a director to disclose any interest in a transaction entered into by the company.
Timeline: The disclosure of interest must be made at the first meeting of the board of directors in which the director participates as a director, and thereafter at the first board meeting of each financial year or whenever there is any change in such interest.
Penalty: If a director fails to comply with the disclosure requirements under Section 184, they may face a penalty of up to Rs. 1 lakh.
Form: The disclosure of interest can be made in writing to the board of directors in Form MBP-1.
Reporting Authority: The disclosure of interest must be made to the board of directors of the company.
