MCA vide notification dated: 07th May, 2018 has notified 28 more sections of Companies Amendment Act, 2017. One of those is Section 117 which explains Resolutions and agreements to be filed under Companies Act,2013. This amended section came into effect form 07th May, 2018. In this editorial author shall endeavor to briefly discuss Impact of such amendment on the working of Companies and why this section is Important. Main Question now is How e-form MGT-14 is threat / dangerous after 07.05.2018?
As per Section-117 of Companies Act, 2013:
Section- 117 (1): A copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the registrar within 30 days of the passing or making thereof in such manner and with such fees as may be prescribed within the time specified under section 403[1]:
As per Section 117(3) following Resolution required to file with ROC:
a) Every Special Resolution is required to file with ROC in e-from MGT-14.
b) Resolutions passed in pursuance of sub-section (3) of section 179;
c) Resolution passed by a Company u/s 180(1) (c).
d) Any resolution of the Board of Directors of a company or agreement executed by a company, relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director;
As per author understanding of Companies act, 2013 read with rules of companies act, 2014, Author has prepared the list of resolutions required to be file in mgt-14 with roc within 30 days of passing of resolution. List is given at the end of the editorial
CONSEQUENCES OF NOT FILING OF FORM MGT-14:
If the Company failed to file given resolutions in e-form MGT-14 within 30 days of Passing of Resolution. Then additional Feel will be applicable as table given below: As per Section 403(1).
A. ADDITIONAL FEES:
Table of Additional fees which shall be applicable for delays in filing of the forms other than for increase in Nominal Share Capital:
| Period of Delays | Forms including charge documents |
| Upto 30 days | 2 times of normal filing fees |
| More than 30 days and upto 60 days | 4 times of normal filing fees |
| More than 60 days and upto 90 days | 6 times of normal filing fees |
| More than 90 days and upto 180 days | 10 times of normal filing fees |
| More than 180 days and upto 270 days | 12 times of normal filing fees |
Delay beyond 30 days, the second proviso of section 403(1) of the Act may be referred.
B. PENALTY:
If company fails to file e-form within 30 days then provisions of section- 403(2) will applicable.
Language of Section 403:
(1) Any document, required to be submitted, filed, registered or recorded, or any fact or information required or authorised to be registered under this Act, shall be submitted, filed, registered or recorded WITHIN THE TIME SPECIFIED IN THE RELEVANT PROVISION ON PAYMENT OF SUCH FEE AS MAY BE PRESCRIBED:
NOTE: As per Language of Section given above, if a company fails to file E-form within 30 days from the date of passing of resolution company have to pay additional Fees as per above mentioned table Plus Compounding of Offence as per 403(2).
Penalty Which Department Can Be Imposed Is As Per Section 403(2):-
(2) Where a company fails or commits any default to submit, file, register or record any document, fact or information under sub-section (1) before the expiry of the period specified in the relevant section, the company and the officers of the company who are in default, shall, without prejudice to the liability for the payment of fee and additional fee, be liable for the penalty or punishment provided under this Act for such failure or default.
Penalty Provided Under The Act For Such Default Is Given In Section 117(2):-
The Company Shall Be Punishable With Fine Which Shall Not Be Less Than One Lakh Rupees but Which May Extend To Twenty Five Lakh Rupees
AND (+)
Every Office Of the Company Who Is In Default, Including Liquidator Of The Company, If Any, Shall Be Punishable With Fine Which Shall Not Be Less Than 50,000/- Rupees But Which May Extend To Five Lakh Rupees.
BUT THERE IS A WAY TO GET SAVE COMPANY FROM PENALTY OF RS. 100,000/-
460. CONDONATION OF DELAY IN CERTAIN CASES.
Notwithstanding anything contained in this Act,—
(a) Where any application required to be made to the Central Government (MCA) under any provision of this Act in respect of any matter is not made within the time specified therein, that Government may, for reasons to be recorded in writing, condone the delay; and
(b) Where any document required to be filed with the Registrar under any provision of this Act is not filed within the time specified therein, the
Hence if a Company has passed Special Resolution OR Board Resolution as per list given below but failed to file e-form MGT-14 in this respect beyond 30 days, it needs to file application for condonation of delay with Central Government (MCA), so that the FORMS- CG-1 can be filed with Central Government.
Question: 1:- If A Limited Company passed any resolution u/s 117 and 179(3) of Companies Act, 2013 (List of Resolutions given at the end), Company was not aware about provisions and fails to file e-form MGT-14 along with Special Resolution.
Then what will be the treatment?
Solution: : As per Section -117 if Company pass resolution u/s 117(1) on or after 1st April, 2017 there is need file MGT-14 by company for filling of Such Resolution. on 15th May, 2018 Company come to know that there was needed to file same with ROC.
1. If the delay is more than 30 days, for E.g. the Company is filling MGT-14 before 30th April, 2018 then normal fees need to be paid for the purpose of filling of MGT-14.
2. If the Company filed to file form beyond 30th April, 2018 then the Company has to apply for condonation of delay u/s 460 and the Condonation fees and additional fees needs to be paid with the e-form MGT-14.
Hence It Is Recommended That That The Company Should Maintain Calender Of All The Resolutions Passed U/S 117 & 179(3) So That The Delay Should Be Neve Be Exceeding 300 Days.
There Are Approx More Than 50 Nature Of Transactions Which Are Covered U/S 117 And 179(3) As Per List Given Below.
CONCLUSION: So As per Above Discussion it is clear that if company are ignoring or not aware from filling of resolution by Company then WE ARE MOVING TOWARD CONDONATION/ COMPOUNDING.
After 07th May, 2018 notification of MCA, it is biggest threat for the Companies because they have to file application for condonation after expiry of 30 days from the date of passing of resolution.
Process For Filling of Form In Case of Expiry of 30 Days of Passing of Resolution:
As per above discussion if company fails to file e-form MGT- 14 within 30 days from the date of passing of Resolution then below given will be process to file form with ROC.
STEP- I
- Hold a Board Meeting:
Authorize any director or secretary of Company to make application with Central Government u/s 460 for condone the delay of filling of resolution.
- Prepare the Application:
Company will prepare an Application in the favour of Central Government. Company will mention the facts of the resolution and reason for not filling the resolution within time with the ROC. (Get the application signed by any director of company; it’s advisable to get it signed by two directors).
- File Form CG-1: Process to fill Form
– Purpose of application
– Detail of application
– Attach- Application
– Digitally signed by director.
– Minimum filling fees for Small Company or OPC – Rs. 1.000/-
– Minimum filling fees for Other Companies – Rs. 2,000/-
- Process of Form by Central Government:
The power to condone the delay is of Central Government (MCA). MCA will impose the penalty as per reason/ time/ matter of delay.
List Of Board Resolution Required To Be File With Roc In Form Mgt-14 By Company Other Then “Private Limited Company”
| ANNEXURE- A | List Of Board Resolution Required To Be File With Roc In Form Mgt-14 |
| A. | To issue securities, including debentures, whether in or outside India. (In case of shares issue of security means issue of Letter of Offer). |
| B. | To Borrow Monies.
(Borrow Money from any sources including Director) |
| C. | To invest the funds of the Company.
(Also follow provisions of Section 186) |
| D. | To grant loans or give guarantee or provide security in respect of loans. (Also follow provisions of Section 186) |
| E. | To approve financial statement and the Board’s report. |
| F. | To appoint internal auditors. |
| G. | To appoint Secretarial Auditor. |
| H. | To appoint or remove key managerial personnel (KMP).
{KMP includes (MD, WTD, CEO, CFO & CS)} |
| I. | To make Political Contributions. |
| J. | To make calls on shareholders in respect of money unpaid on their shares. |
| K. | To authorize buy-back of securities under section 68. |
| L. | To Diversify the business of the company. |
| M. | To approve Amalgamation, Merger or Reconstruction. |
| N. | Take over a company or Acquire a controlling or substantial stake in another company. |
PRIVATE COMPANIES are now exempt from filing resolutions listed in Section 179(3) and Rule 8 of Chapter XII Rules. Hence private companies will no longer be required to file MGT-14 for prescribed matters taken up at its Board Meetings.
List of Special Resolution Required To Be File With ROC In Form MGT-14
| ANNEXURE- B | List of Special Resolution Required To Be File With Roc In Form MGT-14 | |
| A. | Section – 8 | For a company registered under Section- 8 to convert itself into a company of any other kind or alteration of its Memorandum or Articles. |
| B. | Section – 12 | Change of location of registered office in the same State outside the local limits of the city, town or village where it is situated. |
| C. | Section – 13 | Change of registered office from the jurisdiction of one Registrar to that of another Registrar in the same State. |
| D. | Section – 14 | Amendment of Articles of a private company for entrenchment of any provisions. (To be agreed to by all members in a private company). |
| E. | Section – 14 | Amendment of Articles of a public company for entrenchment of any Provisions. |
| F. | Section – 13 | Change in name of the company to be approved by special resolution. |
| G. | Section – 13(8) | A company, which has raised money from public through Prospectus and still has any unutilized amount out of the money so raised, shall not Change its objects for which it raised the money through prospectus unless a special resolution is passed by the company. |
| H. | Section – 27(1) | A company shall not, at any time, vary the terms of a contract referred to in the prospectus or objects for which the prospectus was issued, except subject to the approval of, or except subject to an authority given by the company in general meeting by way of special resolution. |
| I. | Section – 271 (A) | A company may, after passing a special resolution in its general meeting, issue depository receipts in any foreign country in such manner, and subject to such conditions, as may be prescribed. (Section still not applicable). |
| J. | Section – 48(1) | Where a share capital of the company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or by means of a special resolution passed at a separate meeting of the holders of the issued shares of that class. |
| K. | Section – 62 (1) (c) | Private offer of securities requires approval of company by special resolution. |
| L. | Section – 54 | Issue of Sweat Equity Shares. |
| M. | Section – 66 (1) | Reduction of Share Capital. |
| N. | Section – 67(3)(b) | Special resolution for approving scheme for the purchase of fully-paid shares for the benefit of employees.
(EXCEPT PRIVATE LIMITED COMPANY) |
| O. | Section – 68 (2)(b) | Buy Back of Shares. |
| P. | Section – 71 (1) | A company may issue debentures with an option to convert such debentures into shares, either wholly or partly at the time of redemption:
Provided that the issue of debentures with an option to convert such debentures into shares, wholly or partly, shall be approved by a special resolution passed at a general meeting. |
| Q. | Section – 94 | Keep registers at any other place in India. |
| R. | Section – 149(10) | Re-appointment of Independent Director. |
| S. | Section – 165(2) | Subject to the provisions of sub-section (1), the members of a company may, by special resolution, specify any lesser number of companies in which a director of the company may act as directors. |
| T. | Section – 180(a) | to sell, lease or otherwise dispose of the whole or substantially the whole of the undertaking of the company or where the company owns more than one undertaking, of the whole or substantially the whole of any of such undertakings.
NOT APPLICABLE ON PRIVATE LIMITED COMPANY |
| U. | Section – 180(b) | To invest otherwise in trust securities the amount of compensation received by it as a result of any merger or amalgamation.
NOT APPLICABLE ON PRIVATE LIMITED COMPANY |
| V. | Section – 180(c)
|
to borrow money, where the money to be borrowed, together with the money already borrowed by the company will exceed aggregate of its paid-up share capital and free reserves, apart from temporary loans obtained from the company’s bankers in the Ordinary Course of Business.
NOT APPLICABLE ON PRIVATE LIMITED COMPANY |
| W. | Section – 180(d) | To remit, or give time for the repayment of, any debt due from a director.
NOT APPLICABLE ON PRIVATE LIMITED COMPANY |
| X. | Section – 185 | For approving scheme for giving of loan to MD or WTD. |
| Y. | Section – 186 | Loan& Investment by company exceeding 60% of paid up share capital or 100% of free reserve. |
| Z. | Section – 196 | Appointment of a person as Managerial Personnel if, the age of Person is exceeding 70 year. |
| AA. | Schedule V | Remuneration to Managerial personnel if, profits of company are Inadequate. |
| BB. | Section – 271 (1) (b) | Special Resolution for winding up of the company by Tribunal. |
| CC. | Section – 271 (1) (b) | Special Resolution for winding up of company. |
| DD. | Rule 7(1) Chapter- I | Conversion of private company into One Person Company. |
List Of Ordinary Resolution (These Are Not Required To Be File)
| ANNEXURE- C | List of Ordinary Resolution | |
| A. | Section – 16 | The company in general meeting shall pass an ordinary resolution for change of name on receipt of direction from the Central. |
| B. | Section – 61 | A company, if authorized by its Articles, by ordinary resolution, can increase or consolidate its capital or sub-divide or cancel shares not taken up. |
| C. | Rule 12(6) | Approval of general meeting for issue of bonus shares |
| D. | Section 73(2) | Approval of general meeting for inviting deposits from members. |
| E. | Section – 152 | Appointment of Director. |
| F. | Section – | For consideration of accounts and directors report and report of auditors, declaration of dividend, appointment of director on place of who resign. |
| G. | Section – 148(3) | Remuneration of Cost Auditor shall be fixed by an ordinary resolution at the general meeting |
| H. | Section – 151 | Appointment of a Director by small shareholders. |
| I. | Section – 152 | Appointment of Directors at the first general Meeting. |
| J. | Section – 149 | Appointment of independent Director. |
| K. | Section – 152 | Appointment of Director on being proposed by a member or other person with a deposit of rupees one lakh. |
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]). Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION
[1] The struck part removed by Companies Amendment Act, 2017 w.e.f. 07th May, 2018.
Author Bio
In my Company there was reappointment of Managing Director who exceed the age of 70 years. Now the company had filled the Mgt-14 after the EGM, With special resolution and explanatory statement. But company forget to file MGT-14 after the Board Meeting. Is there any consequences occurred in this case
Can we also interpret that the form MGT-14 filed beyond 180 days will require to apply for condonation of delay?
THANK YOU VERY MUCH FOR YOUR WELL WRITTEN WELL RESEARCHED ARTICLES. MORE AND MORE THANKS FOR MAKING THEM SIMPLER! 🙂 THANK YOU.
SIR
i am not finding section 117 in the said NOTIFICATION NO. SO 1833(E) [F.NO.1/1/2018-CL.I], DATED 7-5-2018
Read. Thanks. Year in solution to Q1 seems 2018 instead of 2017. Amendment in 117 ,indeed, has far reaching consequences.
Thanks for sharing such information
We filed, before 3 days, MGT-14 beyond 30 days with additional fee of 2 times. Form was accepted and taken on record.