
Summary: Section 184 of the Companies Act, 2013, governs a director’s duty to disclose his interest in contracts entered into by his company. While it broadly replaced Section 299 of the Companies Act, 1956, Section 184 introduces a notable narrowing of disclosure obligations and, more critically, an internal contradiction. The two per cent shareholding exemption in Section 184(5)(b) is drawn almost verbatim from the 1956 Act, yet it now collides with a status-based test introduced for the first time in Section 184(2)(a), which deems a director interested by virtue of being a promoter, manager or chief executive officer of the counterparty body corporate, irrespective of his shareholding. This blog examines that contradiction, traces it to its legislative origins, and argues that harmonious construction requires status-based obligation to prevail.
Continue Reading Interested, Yet Exempt: The Internal Contradiction Within Section 184 of the Companies Act, 2013






