Section 184 (1) of the Companies Act 2013 requires that every director to make disclosure of his interest or concern in any company or firm or body corporate or any association of individuals at the first Board meeting or when there is any change in the interest of Directors.

The provisions are founded on the principle that a director is precluded from dealing on behalf of the Company with himself and from entering into engagements in which he has a personal interest conflicting, or which possibly may conflict, with the interest of those to whom he is bound by fiduciary duty to protect. The Act does not prohibit such engagements or contracts or arrangements, but it requires disclosure by the directors of their interests therein to their co-directors.

What is the Applicability of MBP-1 ?

Every director shall at the first meeting of the board in his capacity as a director and at the first meeting of the board held during each financial year or at the first meeting held after there is a change in the disclosures disclose his concern/ interest in any company/body corporate/firm/association of individuals, including details of the shareholding in Form MBP 1.

What is the Contents of the Notice?

• Name of the company/ body corporate/ firms/ association of individuals.
• Nature of interest/concern and changes, if any shareholding
• The date on which interest/concern arose or changed
• Place, date and signature of the Managing Director/Director/Secretary or Whole Time Director. 

3. What is the Penalty for Non-Compliance?
5. The director in default shall be punishable with imprisonment which may extend up to 1 year or with fine which may extend to a maximum of Rs 1 lakh or with both.

Preservation of Notice for how many year

All notices shall be kept at the registered office, and it shall be preserved for a period of 8 years from the end of the financial year to which it relates. The custody of the notice shall be with the company secretary or any person authorized by the board.

Does form MBP-1 have to be filed anywhere, or attached with any form?

Form MBP-1 need not be filed anywhere or attached to any form. The details need to be simply entered into the register of contracts maintained in form MBP-1. Download draft MBP-1 template

6. Is it necessary for a director to give disclosure of his shareholdings in companies, irrespective of how much shareholding he has?
8. Yes, it is necessary for a director to give disclosure of any of his shareholdings in companies while giving the general disclosure of interest.
10. At what point is the disclosure required?
12. Disclosure u/s 184 (2) is to be made by the Director at the meeting of the Board in which a contract or arrangement is discussed and entered into/proposed to be entered into with any entity in which such director has interest in the manner/ to the extent specified therein. In case the Director becomes concerned or interested after the contract or arrangement is entered into, such disclosure is required to be made forthwith at the first meeting of the Board held after he becomes concerned or interested.