Summary: Board resolutions are critical for compliance with MGT-14 filing requirements under the Companies Act, 2013. Public companies must pass resolutions for activities such as calls on unpaid share money, buy-back of securities, issuance of securities, borrowing funds, investing, granting loans, approving financial statements, business diversification, mergers, acquisitions, political contributions, and appointing/removing key managerial personnel (KMP), internal auditors, or secretarial auditors under Section 179(3) and related rules. Both public and private companies must file MGT-14 for resolutions or agreements regarding the appointment or variation in terms of managing directors under Section 117(3)(c) and other prescribed matters under Section 117(3)(h). However, private companies are generally exempt from MGT-14 filing for resolutions under Section 179(3) due to exemptions under Notification No. G.S.R.464(E) dated June 5, 2015. Exemptions also apply to certain entities such as banking companies, specific NBFCs, and housing finance companies when granting loans or guarantees in the ordinary course of business. Notably, if a private limited company is a subsidiary of a public limited company, it must comply with provisions applicable to public companies.
MANDATORY BOARD RESOLUTIONS FOR MGT-14 FILING: PUBLIC AND PRIVATE COMPANIES
> BOARD RESOLUTIONS BY PUBLIC COMPANIES
1. To make calls on shareholders in respect of money unpaid on their shares under Section 179(3).
2. To authorize the buy-back of securities under Section 68.
3. To issue securities, including debentures, whether in or outside India under Section 179(3).
4. To borrow monies under Section 179(3).
5. To invest the funds of the company under Section 179(3).
6. To grant loans, give guarantees, or provide security in respect of loans under Section 179(3).
7. To approve the financial statement and the Board’s report under Section 179(3).
8. To diversify the business of the company under Section 179(3).
9. To approve amalgamation, merger, or reconstruction under Section 179(3).
10. To take over a company or acquire a controlling or substantial stake in another company under Section 179(3).
11. To make political contributions under Rule 8 of The Companies (Meetings of Board and Its Powers) Rules, 2014.
12. To appoint or remove key managerial personnel (KMP) under Rule 8 of The Companies (Meetings of Board and Its Powers) Rules, 2014.
13. To appoint internal auditors and secretarial auditors under Rule 8 of The Companies (Meetings of Board and Its Powers) Rules, 2014.
> BOARD RESOLUTIONS BY PRIVATE & PUBLIC COMPANIES
1. 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 under Section 117(3)(c).
2. Any other resolution or agreement as may be prescribed and placed in the public domain under Section 117(3)(h).
> EXEMPTIONS
- In respect of a resolution passed to grant loans, give guarantees, or provide security in respect of loans under clause (f) of sub-section (3) of Section 179 in the ordinary course of its business by:
- Banking companies;
- Any class of non-banking financial companies registered under Chapter IIB of the Reserve Bank of India Act, 1934, as may be prescribed in consultation with the Reserve Bank of India;
- Any class of housing finance companies registered under the National Housing Bank Act, 1987, as may be prescribed in consultation with the National Housing Bank.
>NOTES:
- If a Private Limited Company is a subsidiary of a Public Limited Company, then sections applicable to Public Companies must be complied with by the Private Limited Company.
- For Private Companies, MGT-14 is not required to be filed for resolutions passed in pursuance of sub-section (3) of Section 179 because Section 117(3)(g) is exempt for Private Companies under Notification No. G.S.R.464(E) dated 5th June 2015.
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