As the new financial year begins, directors must submit various disclosures including Form MBP-1, DIR-8, and declarations of compliance with the Company’s Code of Conduct and Insider Trading Regulations. Timely collection of these disclosures is crucial for governance and compliance, helping avoid regulatory penalties or disqualification.
As we begin the new financial year, it’s time to collect annual declarations and disclosures from directors to ensure compliance with the Companies Act, 2013, SEBI LODR Regulations, and SEBI (Prohibition of Insider Trading) Regulations.
Below is a comprehensive checklist of disclosures to be obtained from each director/designated person in April 2025:
1. Form MBP-1 – Disclosure of Interest
- Purpose: To disclose director’s interest in other companies, LLPs, firms, associations, etc.
- Due Date: First Board Meeting of FY 2025–26
- Applicability: All Companies (Private, Public, Listed)
2. Form DIR-8 – Declaration of Non-Disqualification
- Purpose: Confirmation that the director is not disqualified under Section 164 of the Companies Act.
- Due Date: Before appointment or annually before the first Board Meeting
- Applicability: All Companies
3. Annual Declaration under Code of Conduct
- Purpose: Confirmation of compliance with the Company’s Code of Conduct.
- Due Date: First Board Meeting of the financial year
- Applicability: Especially applicable for Listed Companies (SEBI LODR)
4. Material Financial/Commercial Transaction Disclosure
- Regulation: SEBI LODR Regulation 26(5) & 26(6)
- Purpose: Disclosure of transactions with potential conflict of interest.
- Due Date: Annually and as and when such transactions occur
- Applicability: Directors of Listed Companies and their subsidiaries
5. Declaration of Independence
- Purpose: To confirm that Independent Directors meet all criteria under Section 149(6).
- Due Date: First Board Meeting of FY
- Applicability: Public Companies (if ID is required), Listed Companies
6. Annual Insider Trading Declaration – SEBI (PIT) Regulations
- Purpose: Disclosure by all designated persons (including Directors) of PAN and mobile number of immediate relatives and persons with whom DPs shares material financial relationship .
- Due Date: Annually
- Applicability: All Designated Persons (Directors, KMPs, etc.)
Reminder: These disclosures form the basis for statutory registers, annual filings, and board report disclosures. Timely collection ensures good governance and avoids regulatory lapses.
FAQs
Q1. Can MBP-1 and DIR-8 be submitted in soft copy or digitally signed?
Yes, companies may accept digitally signed or PDF submissions through the company’s designated email or portal. However, retention of records should comply with secretarial standards.
Q2. What if a director has no interests to disclose in MBP-1?
A “Nil” disclosure is still required to be submitted to comply with Section 184 of the Companies Act.
Q3. Is the Insider Trading declaration mandatory even if the director has not traded in shares?
Yes, all designated persons (including directors) must submit the annual declaration, regardless of whether any trades occurred.
Q4. What is the consequence of delay or non-submission of these disclosures?
It can lead to non-compliance in Board Reports, ROC filings, or SEBI audits—potentially resulting in penalties or disqualification proceedings.
Q5. Should Independent Directors submit both DIR-8 and Declaration of Independence?
Yes. DIR-8 confirms eligibility under Section 164; the independence declaration confirms compliance with Section 149(6).
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