In he is in any way, whether directly

In terms of section 300(1), no director of a company
shall, as a director take any part in the discussion of, or vote on, any
contract or arrangement entered into or to be entered into by or on behalf of
the company if he is in any way, whether directly or indirectly, concerned or
interested in the contract or arrangement nor shall his presence count for the
purpose of quorum at the time of any such discussion or vote and if he votes,
his vote shall be void.

A director would be entitled to participate in
discussion or vote on the resolution to appoint his brother as additional
director and the appointment would not be hit by section 300(1).

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Appointment of a private limited company
as sole selling agent in which a solicitor-director was interested

A solicitor was a director of a public limited
company for which he was solicitor. The solicitor was also interested in a
private limited company of the same group which was appointed as the sole
selling agent was void and as there was no majority in favor of the resolution,
no valid resolution was passed at the board meeting.

Applicability to a private limited
company

Section 207 requiring prior consent of board on
certain contracts, section 299 requiring disclosure of interest by directors
and section 301 requiring maintenance of register are applicable to a private
limited company also.. But, under section 300 an interested director on any
item may take part on the proceedings and vote at a board meeting in a pure
private limited company.

Register of interested contracts

Every company, private limited company or public
shall keep a register and enter therein particulars of all contracts or
arrangements to which section 297 or 299 applies including contracts which are
exempt under the provisions as under:

Date of contract/arrangement

Party with whom entered into

Principal terms and conditions

The date on which the contracts were placed before
the board.

Names of directors voting in favor or against or
remaining neutral.

The register shall also specify the names of firms
and bodies corporate which notice has been given by every director under section
299.

The register shall be placed before the succeeding
board meeting and shall be signed by the directors present at the meeting.

Inspection of register

A member of company may inspect the register free of
charge and either take extracts or copies may be asked for on the payment of
same fees as prescribed.

Register of contracts under section 301
will contain all contracts/arrangements

The department has clarified that the requirement of
section 301 will also apply to any contract or arrangement in the bodies
corporate of which a general notice has been given by a director pursuant to
section 299(3).

Matters which shall always be considered
at meeting of the board

As
there shall be at least four board meetings in a year and as in fact the boards
of many leading companies meet more often, it is an unwritten rule that all
matters are submitted to the board for consideration and approval unless some
matters are delegated by the board to any director or managing director or
committee of direct