COMPANIES ACT 1963 – SECT 194 Duty of director to disclose his interest in contracts made by the company.
194.—(1) It shall be the duty of a director of a company who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the company to declare the nature of his interest at a meeting of the directors of the company.
(2) In the case of a proposed contract the declaration required by this section to be made by a director shall be made at the meeting of the directors at which the question of entering into the contract is first taken into consideration, or if the director was not at the date of that meeting interested in the proposed contract, at the next meeting of the directors held after he became so interested, and in a case where the director becomes interested in a contract after it is made, the said declaration shall be made at the first meeting of the directors held after the director becomes so interested.
(3) Subject to subsection (4), for the purposes of this section, a general notice given to the directors of a company by a director to the effect that he is a member of a specified company or firm and is to be regarded as interested in any contract which may, after the date of the notice, be made with that company or firm, shall be deemed to be a sufficient declaration of interest in relation to any contract so made.
(4) No such notice as aforesaid shall be of effect unless either it is given at a meeting of the directors or the director takes reasonable steps to secure that it is brought up and read at the next meeting of the directors after it is given.
(5) ( a ) A copy of every declaration made and notice given in pursuance of this section shall, within 3 days after the making or giving thereof, be entered in a book kept for this purpose. Such book shall be open for inspection without charge by any director, secretary, auditor or member of the company at the registered office of the company and shall be produced at every general meeting of the company, and at any meeting of the directors if any director so requests in sufficient time to enable the book to be available at the meeting.
( b ) If a company fails to comply with this subsection the company and every officer of the company who is in default shall be liable to a fine not exceeding £100 and if any inspection or production required thereunder is refused, the court may by order compel an immediate inspection or production.
(6) Any director who fails to comply with this section shall be liable to a fine not exceeding £100.
(7) Nothing in this section shall be taken to prejudice the operation of any rule of law restricting directors of a company from having any interest in contracts with the company.