A company is required under Section 117(1) of the Companies Act 2013 and its corresponding rules to submit Form MGT-14 to the Registrar of Companies (ROC). This form must be filed within 30 days of passing any resolution in a company meeting.
Companies are exempt from filing Form MGT-14 with the ROC for resolutions concerning the provision of security, granting of loans, or giving guarantees in the normal course of business, as specified under section 179(3)(f) of the Companies Act 2013 in conjunction with rule 8 of the Companies (Meetings of Board and its Powers) Rules 2014.
- A banking company
- Any class of non-banking financial company registered under the Reserve Bank of India
- Any class of housing finance company registered under the National Housing Bank Act, 1987.
Purpose of Filing:
A company conducts multiple meetings throughout the year, including those of the Board of Directors, Shareholders, or Creditors, where resolutions are adopted. The company or liquidator, as applicable, must file details of these resolutions with the ROC within 30 days of their passing using Form MGT-14.
Resolutions/Agreements to be Filed Under Section 117(3):
- Resolutions requiring unanimous agreement by all members of the company, unless specified as special resolutions.
- Resolutions passed by the Board of Directors concerning the appointment, reappointment, renewal, or modification of terms of the managing director's appointment.
- Resolutions agreed upon to be passed by a specified majority or in a particular manner by any class of members.
- Resolutions mandating the winding up of the company as outlined in Section 59 of the Insolvency and Bankruptcy Code 2016.
- Resolutions passed under Section 179(3) of the Companies Act 2013.
- Any other resolution or agreement prescribed and disclosed publicly.
List of Resolutions to be Filed in MGT-14:
The list of resolutions filed in MGT-14 are listed under 3 categories as follows:
Board Resolutions:
1. Inspection of subsidiary books of accounts and other records.
2. Authorization for making political contributions.
3. Approval for investments, loans, guarantees, or securities by the company.
4. Approval of related party transactions contracts/agreements.
5. Appointment of whole-time key managerial personnel.
6. Appointment of a person as managing director if they hold a similar position in another company.
7. Approval of a shelf-prospectus.
8. Appointment, re-appointment, renewal, or variation of terms of appointment of managing director.
9. Calling of unpaid amounts on shares from shareholders.
10. Authorization of buy-back of securities under Section 68.
11. Issuing securities (including debentures) in India or outside India.
12. Borrowing money.
13. Approval of the Board’s report and financial statements.
14. Diversification of the company's business.
15. Approval of amalgamation, merger, or reconstruction.
16. Taking over a firm or acquiring controlling stake in another firm.
Special Resolutions:
1. Inserting an entrenchment provision in the Articles of Association.
2. Changing the registered office from one city to another within the same state.
3. Altering the Memorandum of Association.
4. Changing the company's objects if money raised remains unutilized.
5. Amending the Articles of Association.
6. Varying terms of a contract or objects in the prospectus.
7. Issuing depository receipts in foreign countries.
8. Varying shareholder rights.
9. Issuing sweat equity shares.
10. Issuing employee stock options.
11. Making a private offer of securities.
12. Issuing debentures or loans convertible into shares.
13. Reducing share capital.
14. Purchasing or subscribing fully paid shares for employees' benefit.
15. Conducting a buyback of shares.
16. Keeping registers at a place other than the registered office in India.
17. Removing an auditor before the term expires.
18. Appointing more than 15 directors.
19. Reappointing an Independent Director.
20. Restricting the number of directorships for a director.
21. Selling, leasing, or disposing substantially all of the company's undertakings.
22. Investing compensation from amalgamation or merger in trust securities.
23. Borrowing money exceeding the aggregate of paid-up share capital and free reserves, except temporary loans from bankers.
24. Extending repayment time for debt owed by a director.
25. Establishing a loan scheme for directors.
26. Making loans or investments exceeding specified limits relative to the company's financial accounts.
27. Appointing a director (managing director/whole-time director/manager) aged over 70 years.
28. Initiating investigations into the company's affairs.
29. Applying to the registrar for removal of the company's name from the register.
30. Scheming amalgamation of financially distressed companies with another.
31. Winding up the company by tribunal order.
32. Voluntarily winding up the company.
33. Granting liquidators authority to accept shares as consideration for property sales.
34. Approving arrangements between the company to be wound up and its creditors.
35. Authorizing the company liquidator with specific powers.
36. Disposing of company books and papers upon complete dissolution.
Ordinary Resolutions:
1. Changing the company's name upon direction from the Registrar due to false information in the application.
2. Changing the company's name upon direction from the Central Government due to similarity with an existing company name or registered trademark.
3. Accepting deposits from the public.
4. Representing the corporation at meetings of other companies.
5. Representing the corporation at meetings of creditors.
6. Appointing a statutory auditor who is not a retiring auditor.
7. Removing a director before the end of their term.
8. Delegating powers specified under Section 179(3) clauses (d) to (f) by the board.
9. Granting permission for non-cash transactions to a director of the company, its holding, subsidiary, or associate company.
10. Appointing a managing director, whole-time director, or manager.
11. Initiating dissolution after reviewing the report of the company liquidator.
12. Voluntarily winding up the company upon expiration of its duration or occurrence of a stipulated event as per the articles.
13. Entering into a related party transaction when prescribed paid-up capital criteria are met or transaction amount exceeds the prescribed limit.
Penalty Under Section 117:
|
Defaulting party |
Penalty |
|
Company |
Minimum: Rs 10,000 |
|
Every officer in default (including the liquidator of the company) |
Minimum: Rs 10,000 |
Time Limit For Filing MGT-14:
Under Section 117(1), the company must submit the resolutions and agreements in Form MGT-14 within 30 days from their passing or entering into, respectively.
Consequences of Failure to File MGT-14 Within 30 Days From Passing of Resolution:
1. File Form CG-1 with the Ministry of Corporate Affairs (MCA) to request condonation for the delay in filing Form MGT-14.
2. MCA will include the penalty in the condonation order, which the company is required to pay.
3. After receiving the condonation order and paying the penalty, submit a copy of the order along with the penalty receipt in Form INC-28 to the Registrar of Companies (ROC).
4. Finally, file e-form MGT-14, mentioning the Service Request Number (SRN) of Form INC-28.
Conclusion:
Ensuring compliance with the filing of Form MGT-14 is essential for companies under the Companies Act 2013. This form captures crucial resolutions and agreements passed in meetings, which must be submitted to the Registrar of Companies within 30 days. Failure to do so can result in penalties, emphasizing the importance of timely and accurate reporting. Adhering to these regulations not only fulfills legal obligations but also promotes transparency and accountability within corporate governance frameworks, safeguarding the interests of stakeholders and enhancing the credibility of the company in the business environment. Thus, concluding Form MGT-14 is paramount for maintaining regulatory compliance and organizational integrity.
