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(a) that the opportunity came to the director in the course of his duties,
(b) that he has made personal profits therefrom.
(i) Interest or expectation test, i.e., whether the company has an established
interest or expected interest in the pre-existing relationship.
(ii) Line of business test – whether the activity is closely associated with the
existing or prospective activities of the company, and
(iii) Fairness test – what is fair and equitable under the circumstances.
(i) The Board must sanction the contracts in which directors are interested
and if the Board refuses to give its consent then anything done in
pursuance of the contract shall be voidable at the option of the Board.
(ii) As per Section 299, the director must disclose his interest in a contract
entered into or to be entered into, on behalf of the company.
(iii) Section 300 forbids the interested director from participating in the
discussion or voting on a resolution relating to that transaction.
(iv) Particulars of contracts, companies or firms in which directors are
interested are required to be entered in the Register maintained for the
purpose which shall be open to inspection by any member of the
company.