Powers of explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 179(3) lists powers the Board of a company must exercise only at a meeting. Rule 8 adds to that list: political contributions, the appointment or removal of key managerial personnel (KMP), and the appointment of internal auditors and a secretarial auditor. Rule 9 requires every director to disclose his concerns and interests in writing in Form MBP-1. Our board resolution and legal documents service drafts the resolutions and registers that go with both. This article reflects the rules as amended up to G.S.R. 811(E) dated 3 November 2025 per the MCA e-book. Later amendments should be checked.
Three powers, in addition to those in section 179(3), can be exercised by the Board only by resolutions passed at Board meetings: to make political contributions, to appoint or remove KMP, and to appoint internal auditors and a secretarial auditor (rule 8). A circular resolution is therefore not enough for them. Every director must give notice of his concern or interest in Form MBP-1 and must cause it to be disclosed at the meeting held immediately after the date of the notice; the notices are kept for eight years from the end of the financial year to which they relate (rule 9).
Rule 8: powers exercised only at a Board meeting
Rule 8 says: in addition to the powers specified in section 179(3) of the Act, the following powers are exercised by the Board of Directors only by means of resolutions passed at meetings of the Board:
| Item | Power |
|---|---|
| (1) | To make political contributions |
| (2) | To appoint or remove key managerial personnel (KMP) |
| (3) | Omitted |
| (4) | To appoint internal auditors and secretarial auditor |
| (5) to (9) | Omitted |
The item numbers (3), (5), (6), (7), (8) and (9) were omitted by the Amendment Rules of 18 March 2015, which is why the numbering has gaps. The omitted items are not part of the rule today. The effect is that the three live items cannot be passed by a resolution by circulation under rule 5 or section 175; they need a Board meeting. The Act's list of powers is in Sections 179 and 180: Powers of the Board.
Practical meaning of each power
- Political contributions. The Board takes the decision at a meeting; the Act's section 182 conditions are not in these rules, so check the Act for limits and disclosure. See Sections 181 to 183: Company Contributions.
- KMP appointment or removal. Appointment and removal both need a meeting resolution. The KMP provisions are in Section 203: Key Managerial Personnel and in our appointment and resignation of KMP service.
- Internal auditors and secretarial auditor. The Board appoints both at a meeting. The procedure for the secretarial auditor is explained in Secretarial Auditor Appointment Under Rule 8: Resolution and Communication and the internal auditor's eligibility in Section 138.
Rule 9: the director's disclosure of interest in MBP-1
- 9(1). Every director must disclose his concern or interest in any company or companies, bodies corporate (including shareholding interest), firms or other association of individuals, by giving a notice in writing in Form MBP 1.
- 9(2). It is the duty of the director giving notice of interest to cause it to be disclosed at the meeting held immediately after the date of the notice.
- 9(3). All notices are kept at the registered office and preserved for eight years from the end of the financial year to which they relate. They are kept in the custody of the company secretary or any other person authorised by the Board.
The rule does not say how often a notice is given; the timing, including when a notice is required again, is set by section 184 of the Act. See Section 184: Disclosure of Interest. The working guide on director declarations is DIR-2, DIR-8, MBP-1 and the Independence Declaration. The register of contracts in which directors are interested is a separate matter; see Rules 16 and 17.
Rule 7: vigil mechanism (separate article)
Rule 7, which requires listed companies and certain other companies to establish a vigil mechanism, has its own article: see Vigil Mechanism Applicability Under Rule 7: Three Classes of Company.
A worked example
At a meeting, the Board of Maple Leaf Chemicals Limited (invented) resolves to appoint a Chief Financial Officer and to appoint a firm of chartered accountants as internal auditor. Both decisions are recorded as resolutions passed at the Board meeting, not by circulation. Director Sunil Menon has just joined the Board of another company and holds shares in a firm; he gives notice in Form MBP-1 and causes it to be disclosed at the next meeting, held immediately after the date of the notice. The company secretary files the notice at the registered office and preserves it for eight years from the end of that financial year.
Practical points
- Mark the three rule 8 items on the Board's annual agenda planner so they are never taken by circulation.
- Keep a single register of MBP-1 notices, filed by financial year, with the date of each disclosure at the meeting.
- Record in the minutes that the MBP-1 notice was tabled at the meeting held immediately after its date.
- Appointments of auditors under the Act and Rules have separate resolutions and forms; see Rules 1 to 5 of the Audit and Auditors Rules.
Need help with Board resolutions and director disclosures?
A resolution passed by circulation where a meeting was required can be challenged later, and missing MBP-1 notices are a common gap. We can prepare the Board agenda, the resolutions and the MBP-1 register through our board resolution and legal documents service.
Key takeaways
- Rule 8 lists three powers that are exercised only by resolutions at Board meetings, on top of section 179(3).
- They are political contributions, appointing or removing KMP, and appointing internal auditors and a secretarial auditor.
- Every director gives notice of interest in Form MBP-1 and causes it to be disclosed at the next meeting.
- MBP-1 notices are preserved for eight years from the end of the financial year to which they relate.
- Rule 7 (vigil mechanism) is explained separately.
Read next
- Sections 179 and 180: Powers of the Board
- Section 184: Disclosure of Interest by Directors
- DIR-2, DIR-8, MBP-1 and the Independence Declaration
- Rules 11 and 13: loans and investments under section 186
Disclaimer: Based on the Companies Act, 2013 rules (and the Companies (Auditor's Report) Order, 2020) named above as consolidated in the MCA e-book (consulted on 3 October 2026), with the later notifications the article names. Later amendments, fees, forms and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.