The world of corporate governance and regulatory compliance often involves a multitude of paperwork and filings, each serving a specific purpose in ensuring transparency and adherence to the law. Among these essential documents is Form MGT-14, a critical component of compliance with the Companies Act, 2013. This article dives into the intricacies of Form MGT-14, shedding light on its purpose, the types of resolutions it necessitates for filing, and the stringent deadlines that companies must meet. Additionally, it explores the penalties associated with non-compliance, emphasizing the importance of understanding and fulfilling these obligations to maintain a seamless and legally sound corporate operation. So, let’s embark on a journey to decode the significance of Form MGT-14 and unravel the crucial aspects that companies must navigate in their pursuit of regulatory compliance.
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Form MGT-14 & Its Purposes
Form MGT-14 is a form used for filing certain resolutions and agreements with the Registrar of Companies (RoC) as required under the Companies Act, 2013. Form MGT-14 is required to be filed pursuant to Section 94(1), 117(1) of the Companies Act, 2013 and Section 192 of the Companies Act, 1956 and rules made thereunder. The primary purpose of filing Form MGT-14 is to inform the RoC about important decisions and actions taken by a company during its Board meeting (BM), annual general meeting (AGM) or extraordinary general meeting (EGM). These resolutions may include changes to the company’s capital structure, alterations to the company’s Articles of Association, appointment or removal of directors, and various other significant decisions.
Resolutions/Agreements to be Filed Under Section 117(3)
1. Special Resolutions;
2. Resolutions which have been agreed to by all the members of the company but which if not so agreed to, would have not been effective for their purpose unless they had been passed as special resolutions;
3. Any resolution passed by the BOD or agreement executed by a company with regard to appointment/reappointment/renewal of the appointment/variation of the terms of appointment of the managing director;
4. Resolutions or agreements which have been agreed to be passed by any class of members but which, if not agreed to, would not have been effective for their purpose unless they had been passed by a specified majority or otherwise in some particular manner; and all resolutions or agreements which effectively bind such class of members though not agreed to by all those members;
5. Resolutions requiring winding up of the company as specified under section 59 of the Insolvency and Bankruptcy Code 2016;
6. Resolutions passed under Section 179(3);
7. Any other resolutions or agreements as may be prescribed and placed in the public domain.
List of Resolutions to be Filed in MGT-14
The list of resolutions filed in MGT-14 is listed under 3 categories as follows:
Annexure A – Board Resolutions
The following Board resolutions need to be filed in FORM MGT-14:
1. Authorization for making political contributions.
2. Issuing loans or providing guarantee or security in respect of loans.
3. Appointment/removal of key managerial personnel of a company.
4. Appointment of internal auditor.
5. Appointment of secretarial auditor.
6. Investing the funds of the company.
7. Calling of the unpaid amount on the shares from the shareholders.
8. Authorization of buy-back of securities as provided under Section 68.
9. Issuing securities (including debentures) inside/outside India.
10. To borrow money.
11. Approval of the Board’s report and financial statements.
12. To diversify the business of the company.
13. To approve amalgamation, merger or reconstruction.
14. Taking over a company or acquiring a controlling stake in another company.
Annexure B – Special Resolutions
The following special resolutions need to be filed FORM MGT-14:
1. Insertion of a provision of entrenchment in Articles of Association by companies- Section 5(4)
2. Shifting of a registered office from one city to another in the same state- Section 12(5)
3. Alteration of Memorandum of Association- Section 13(1)
4. Change in the object in case the money raised from the public is unutilized (only in case of a public limited company)- Section 13(8)
5. Alteration of Articles of Association having the effect of conversion of private company into public company or vice versa- Section 14(1)(a) &(b)
6. Variation in terms of a contract referred to in the prospectus or objects for which the prospectus was issued- Section 27(1)
7. Issue of the depository receipts in any foreign country- Section 41
8. Variation of shareholder rights of any class- Section 148(1)
9. Issue of sweat equity shares- Section 54
10 Issue of employee stock options- Section 62(1)(b)
11. A private offer of securities/Private Placement of securities- Section 62(1)(c)
12. Approving terms and conditions of issue of optionally convertible debentures or loans into shares- Section 62(3) Proviso
13. Reduction of share capital- Section 166
14. Purchase/subscription of fully paid shares for the benefit of employees- Section 67(3)(b)
15. Buyback of shares- Section 68(2)
16. To issue optionally convertible debentures with an option to convert whole or part of the debentures into Shares at the time of redemption- Section 71
17. Keeping/Maintaining registers/copies of Annual Return at any other place in India other than the registered office- Section 94(1) Proviso
18. Removal of auditor before the expiry of the term- Section 140(1)
19. Appointment of more than 15 directors- Section 149(1) Proviso
20. Reappointment of Independent Director after expiry of a term of five consecutive years- Section 149(10)
21. Restricting the number of directorships of a director- Section 165(2)
22. Exercising the powers mentioned under Section 180, by the Board of Directors with the prior consent of the company- Section 180
23. To approve a scheme for loan to be given to a managing or whole-time director- Section 185
24. Approving loan or guarantee or providing any security or the acquisition of shares exceeding 60% of paid-up capital, free reserves and securities premium or 100% of its free reserves and securities premium, whichever is more- Section 186(3)
25. Appointment of a person as managing director/whole-time director/manager above the age of 70 years- Section 196
26. The affairs of the company ought to be investigated- Section 210
27. The affairs of the company ought to be investigated by the Serious Fraud Investigation Office- Section 212
28. Application to the registrar for removal of name from the register- Section 248(2)
29. Approving scheme relating to the amalgamation of sick companies with any other company- Section 262
30. Resolve winding up of a company by the tribunal- Section 271
31. Resolve voluntary winding up of the company- Section 304
32. To confer general authority on the liquidator pursuant to Section 139- Section 139(1)
33. Approval for the arrangement between the company which is about to be wound up and its creditors to be binding- Section 321
34. Providing sanction to the company liquidator to exercise certain powers- Section 343
35. Disposal of books and paper of the company when the company is completely wound up and is about to be dissolved- Section 347
36. To adopt Table F in Schedule I, if required- Section 371
37. Offer or invitation for subscription of securities or Private Placement. The proposed offer of securities or invitation to subscribe to securities has been previously approved by the shareholders of the company, by a Special Resolution, for each of the Offers or Invitations- Rule 14(2)(a) of The Companies (Prospectus and allotment of securities) Rules, 2014.
Annexure C – Ordinary Resolutions
The following ordinary resolutions need to be filed FORM MGT-14:
1. Change of name of a company after receiving direction from the registrar if it has been found that the name was applied to, by furnishing false information
2. Change of name of a company after receiving direction from the Central Government if the name/trademark is too identical to an existing company name /registered trademark.
3. Issue of equity shares with differential rights.
4. Increase or consolidate its capital or sub-divide or cancel shares which haven’t been taken, provided that such action is endorsed by its Articles.
5. Approving a scheme of employees’ stock option plan by the shareholders.
6. Approving financial statements and the reports of the Board of Directors and Auditors, declaration of dividends, appointment of auditor, appointment of new directors in place of the retiring ones and determining the remuneration of the auditors in the Annual General Meeting.
7. Approving issue of bonus shares.
8. Acceptance of deposits from the public.
9. Approving remuneration of cost auditor.
10. Removal of director before the expiry of the period of his office.
11. Permission to enter into non-cash transactions with a director of the company/holding/subsidiary/associate company.
12. Entering into a contract/arrangement with a related party in case of companies having prescribed paid-up capital or the amount of the transaction exceeds the prescribed amount.
Due date for Filing Form MGT-14- Section 117(1)
As per Section 117(1), the company shall file all the resolutions and agreements in form MGT-14 within 30 days from the resolution being passed or the agreement being entered into.
Penalty for non-compliance- Section 117(2)
As per Section 117(2), if a company fails to file the required Resolutions or Agreements prior to the expiry of the period mentioned, the penalty shall be as follows:
| DEFAULTING PARTY | PENALTY |
| Company | Minimum penalty: Rs.10,000/-,
In case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues. Maximum penalty: Rs.2,00,000/- |
| Every officer in default | Minimum penalty: Rs.10,000/-,
In case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues. Maximum penalty: Rs.50,000/- |
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Feel free to contact the author for further clarification at 9953808432 or via mail at cssinghaniaandassociates@gmail.com. The author is the founder of SINGHANIA & ASSOCIATES (Practicing Company Secretaries Firm) based in Delhi.
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Is there exemption to Closely Held Private Limited Company.