WHAT IS FORM MGT-8 AND ITS APPLICABILITY
Form MGT-8 is a certification given on a company’s annual return by a practising company secretary, as per the Companies Act 2013, under Section 92(2).
Provisions Under Companies Act 2013:
According to Section 92(2) of the Companies Act, 2013 read with rule 11(2) of Companies (Management and Administration) Rules 2014, the annual return of:
will be certified by the company secretary in practice, and the certificate shall be in Form No MGT 8. This is a kind of Mini secretarial audit report which is submitted as an attachment to annual return in Form MGT-7.
The Company Secretary shall certify that the annual return discloses the facts correctly and adequately and the firm has complied with all the provisions of the Act.
Objective of this certification:
In this certificate, the company secretary at first certifies that the company secretary has examined the registers, records, and books and papers of the company. This self-certificate of examination is important because at any stage company may not deny this fact and admissible under any proceeding related to fraud and misrepresentation as well as class action suits.
Certification of annual return is subject to opinion and information of the company secretary and examination carried out by the company secretary, its officer, and agents. The information shall always be obtained through some source of information and may have some background documentation.
Aspects which need to be examined:
Penalty in case on non-compliance:
If the Company Secretary certifies the annual return which is not in conformity with the section/rules and doesn’t fulfil the requirements mentioned in section 92, then he/she shall be punishable with fine which shall be a minimum of Rs 50,000 and a maximum of Rs 5 lakh.
A practising company secretary will be liable for disciplinary actions by the Disciplinary Committee of the ICSI under the provisions of Company Secretaries Act, 1980.
Section 448 of Companies Act, 2013 also imposes a penalty if any return, report, certificate, financial statement, prospectus, statement or any other document makes a false statement or omits any material fact.
Under Section 447 of the Companies Act 2013, if someone is found guilty of fraud, then a serious punishment of imprisonment could be imposed. There is imprisonment of a minimum of 6 months to 10 years for this case. In addition to this, a fine could be imposed that will be equal to the amount involved in the fraud or may be extended up to 3 times the fraud amount involved in the fraud. If the case is more serious, involving public interest, the imprisonment would be for a minimum of three years.