Consequences of Filing e-Form MGT-14 After 30 Days

There is confusion regarding Consequences of Filing e-Form MGT-14 After 30 Days which includes- Whether it is required compounding/ Condonation or adjudication and Which authority have power under the Companies act, 2013 for compounding/ Condonation or adjudication?

LEGAL BACKGROUND:

As per Section 117, a copy of every resolution or any agreement, in respect of matters specified in sub-section (3) shall be filed with the Registrar within THIRTY DAYS of the passing or making thereof in such manner and with such fees as may be prescribed.

PENALTY: If any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein,

• SUCH COMPANY shall be liable to a penalty of one lakh rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of twenty-five lakh rupees and
• EVERY OFFICER OF THE COMPANY who is in default including liquidator of the company, if any, shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.

There are many amendments came under this section in last year Like:

I. By Companies Amendment Act, 2017:Before 07^th May, 2018 Companies was required to file e-form MGT-14 within 30 days of passing of resolution and if fails to file within 30 days then in next 270 days with additional fees.

However, by amendment act w.e.f. 07^th May, 2018 provision of 270 additional days removed from Companies Act, 2013.

II. By Companies Amendment Ordinance, 2017:Before 02^nd November, 2018 if Company fails to file e-form MGT-14 within 30 days of passing of resolution it was required to file “Application for Condonation of Delay” with Central Government in e-form CG-1.

III.

IV. However ever after Ordinance w.e.f. 02.11.2018 Power has been transferred to Registrar of Companies for Adjudication of Offence.

PRACTICAL PROCESS:

A. If a Company fails to file e-form MGT-14 within due dates i.e. 30 days from date of passing of resolution. Then what are the consequences:

As per latest provisions after implementation of Companies Ordinance, 2018 i.e. 2^nd November, 2018 ROC having powers of Adjudication.

“In case of non compliance like filing of e-form after 30 days ROC can impose penalty on Company and Officer in Default. ROC after filing of form directly can send notice to Company for payment of penalty without any application, petition in front of any authority.”

B. If a Company fails to file e-form MGT-14 within i.e. 300 days from date of passing of resolution. Then what are the consequences:

• In such case Company will not able to file e-form MGT-14. Because MGT-14 will ask for SRN of INC-28.
• INC-28 can be file only after receiving of order of Condonation.
• Power of Condonation is assigned to Ministry of Corporate Affairs and Company have to file e-form CG-1 for Condonation.

a. FIRST: Company have to file e-form CG-1 with MCA for Condonation in delay in filing of e-form MGT-14

b. SECOND: MCA shall impose penalty in the Condonation order. Company have to make payment of such penalty

c. THIRD: After receipt of order and payment of Penalty. Company shall file copy of order and penalty receipt in e-form INC-28 with ROC.

d. FOURTH: File e-form MGT-14 by mentioning SRN of INC-28.

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).