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HatchLegal
You Build the Dream,... • 8m
𝐃𝐢𝐫𝐞𝐜𝐭𝐨𝐫𝐬, 𝐁𝐞 𝐏𝐫𝐨𝐚𝐜𝐭𝐢𝐯𝐞! 𝐄𝐧𝐬𝐮𝐫𝐞 𝐘𝐨𝐮𝐫 𝐌𝐁𝐏-1 𝐅𝐢𝐥𝐢𝐧𝐠𝐬 𝐀𝐫𝐞 𝐢𝐧 𝐎𝐫𝐝𝐞𝐫 Transparency and accountability are pillars of good corporate governance, and 𝐒𝐞𝐜𝐭𝐢𝐨𝐧 184(1) 𝐨𝐟 𝐭𝐡𝐞 𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐀𝐜𝐭, 2013 ensures directors uphold these principles. Alongside this, 𝐑𝐮𝐥𝐞 9 𝐨𝐟 𝐭𝐡𝐞 𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 (𝐌𝐞𝐞𝐭𝐢𝐧𝐠 𝐨𝐟 𝐁𝐨𝐚𝐫𝐝 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐏𝐨𝐰𝐞𝐫𝐬) 𝐑𝐮𝐥𝐞𝐬, 2014 mandates that every director disclose their concerns or interests in other companies, bodies corporate, firms, or associations of individuals (including shareholdings) through a written notice in 𝐅𝐨𝐫𝐦 𝐌𝐁𝐏-1. 𝐖𝐡𝐞𝐧 𝐒𝐡𝐨𝐮𝐥𝐝 𝐃𝐢𝐫𝐞𝐜𝐭𝐨𝐫𝐬 𝐅𝐢𝐥𝐞 𝐅𝐨𝐫𝐦 𝐌𝐁𝐏-1? 1. At the first board meeting they attend as a director. 2. At the first board meeting of every financial year. 3. At the first board meeting after any changes in their interests or shareholding. 𝐖𝐡𝐚𝐭 𝐇𝐚𝐩𝐩𝐞𝐧𝐬 𝐢𝐟 𝐘𝐨𝐮 𝐅𝐚𝐢𝐥 𝐭𝐨 𝐂𝐨𝐦𝐩𝐥𝐲? Non-compliance can be costly! Recently, the Registrar of Companies (Punjab & Chandigarh) imposed penalties totaling ₹5,00,000 on five directors of a company for failing to file Form MBP-1 over two financial years. Each director was fined ₹1,00,000 for not adhering to the disclosure requirements. 𝐖𝐡𝐲 𝐈𝐬 𝐓𝐡𝐢𝐬 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐈𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭? 1. To ensure transparency in decision-making and dealings. 2. To avoid conflicts of interest between a director’s personal interests and the company’s welfare. 3. To maintain statutory compliance, as these disclosures must be recorded and preserved at the company’s registered office for 8 years. 𝐇𝐨𝐰 Hatch Legal 𝐂𝐚𝐧 𝐇𝐞𝐥𝐩? At Hatch Legal, we specialize in ensuring startups and directors remain compliant with corporate governance regulations. From helping you assess and disclose your interests to maintaining statutory records, we ensure your company operates with clarity and within the law. 𝐏𝐫𝐨 𝐓𝐢𝐩 𝐟𝐨𝐫 𝐃𝐢𝐫𝐞𝐜𝐭𝐨𝐫𝐬: 1. Regularly evaluate your involvement in other entities and update your disclosures in Form MBP-1. 2. Remember, compliance isn’t just a legal formality—it builds trust and credibility among investors, partners, and stakeholders. 3. Don’t let an oversight cost your reputation or your pocket. Let’s work together to ensure your startup’s compliance is watertight.
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