Director Disclosures (MBP-1)

Every director must disclose their interests in any company, firm, or association (including shareholding) using Form MBP-1 as per Section 184(1).

Timeline

• For newly appointed directors: first board meeting after appointment.
• For existing directors: first board meeting of each financial year or upon any changes.

Consequences of Non-Disclosure

• Penalties range from ₹50,000 to ₹1,00,000.
• Undisclosed contracts may be voidable, and directors must account for any profits earned.

First Board Meeting

The first board meeting must be held within 30 days of incorporation under Section 173.

Key Agenda Items:

• Appointment of the Chairman
• Noting the Certificate of Incorporation
• Opening a company bank account
• Appointing the first statutory auditor
• Confirming the registered office
• Taking note of director disclosures (MBP-1)
• Approving the common seal
• Approval for printing share certificates

Appointment of First Statutory Auditor

As per Section 139(6), the first auditor must be appointed within 30 days of incorporation.

Key Notes:

• If the board fails to appoint: Members appoint the auditor within 90 days at an EGM.
• Auditor holds office until the first AGM.

Prohibited Activities for Auditors (Section 144):

• Accounting/bookkeeping
• Internal audit
• Design of financial systems
• Investment advisory or banking
• Management services
• Outsourced financial services

Violations can result in penalties up to ₹5,00,000.

Filing Form INC-20A (Business Commencement Declaration)

Form INC-20A must be filed within 180 days of incorporation. It confirms:

• Payment of share capital by subscribers
• Verification of registered office (Form INC-22)

Failure to file can lead to the company being struck off.

Issuance of Share Certificates

Under Section 56(4)(a), share certificates must be issued within 60 days to initial subscribers.

Mandatory Details:

• Company name & CIN
• Registered office address
• Shareholder details & folio number
• Number of shares & certificate number

Signature Requirement:

• Two directors, or one director if a single-director company
• Company Secretary (if appointed)

Dematerialization of Shares

• Obtain ISIN from NSDL/CDSL
• Appoint a Registrar & Transfer Agent (RTA)
• Enter agreements with depositories
• Shareholders open Demat accounts

Deadline for Non-small private companies: 30 June 2025