Question

State the following statement is True or False:

Under Companies Act,1956 a director need not disclose information to the board about his directorship in other companies.

• A. True
• B. False

Answer 1

The correct option is B False

This statements is False because of the following reasons:

(i) Under section 275 of the Companies Act,1956 a person cannot hold offices as a directors in more than 15 companies at the same time.

(ii) If a director holds office as a directors in more than fifteen companies at the same time , he shall be punishable with a fine extending upto Rs 5,000/- for each directorship in excess of 15 companies.

(iii) Under section 159 of the Companies Act,1956,every company has to file Annual Returns to the Registrar of Companies.

(iv) All details of the directors have to be stand in the Annual Return.

(v) For this, the secretary has to collect this information from every directors of the company.

(vi) Therefore, every director is required to disclosed details of information of other companies in which they act as directors.

However some of the provisions are amended according to Companies Act,2013.