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MGT 14

What is MGT-14?

MGT-14 needs to be filed by a company with the Registrar of Companies (RoC) in accordance with sections 94(1) and 117(1) of the Companies Act 2013. MGT-14 Is an E-filing form that is exempted to private companies.

 

How Important is the MGT-14?

When Meetings of the Board of Directors/Shareholders/Creditors are held, and resolutions are passed at the said meetings. These Resolutions are to be recorded onto the MGT-14 E-file form.

 

Resolutions that can be filed in MGT 14

  • Special Resolutions.
  • Resolutions which have been agreed to be passed as special resolutions by all the members of the company.
  • Any resolution passed by the BOD with regard to appointment/reappointment/renewal/variation of the terms of appointment of the managing director.
  • Resolutions that have been agreed to be passed by a specified majority or in a particular manner by any class of members.
  • Resolutions requiring winding up of the company as specified under section 59 of the Insolvency and Bankruptcy Code 2016.
  • Resolutions passed under Section 179(3).

 

Categories of Resolution:

There are three categories of Resolution

List of Resolutions to be Filed in MGT-14

  • Annexure A – Board Resolutions
  • Annexure B – Special Resolutions
  • Annexure C – Ordinary Resolutions

 

Annexure A – Board Resolution

This annexure need not be filed by Private Limited Companies, though private limited companies which are subsidiaries of public limited entities are not exempt from this provision.

The following board resolutions must be filed in Form MGT-14:

  • To issue securities, inclusive of debentures, either inside or outside the confines of India. It may be noted that in the case of shares, the issue of security denotes the issue of a Letter of Offer.
  • To borrow money from any sources, including a director.
  • To invest the funds of the company. (Also follow provisions of Section 186)
  • To issue loans or provide a guarantee or security in respect of loans. (Also follow provisions of Section 186)
  • To endorse the financial statement and Board’s report.
  • To appoint internal auditors.
  • To Appoint Secretarial Auditor.
  • To appoint or remove Key Managerial Personnel.
  • To make political contributions.
  • To take decisions on those shareholders relating to the money unpaid on their shares.
  • To sanction buy-back of securities under Section 68.
  • To expand the business of the company.
  • To endorse Amalgamation, Merger, or Reconstruction.
  • Take over a company or acquire a controlling or considerable stake in another company.

Annexure B – Special Resolution

The following special resolutions must be files in Annexure B of the form:

  1. For companies registered under Section 8 for converting itself into a company of another kind or alteration of its MOA or AOA.
  2. Change of location of registered office in the same State, but outside the local limits of the city, town, or village where it is currently situated.
  3. Change of registered office from the jurisdiction of one registrar to another in the same state.
  4. Amendment of Articles of a private limited company for the entrenchment of any provisions. This must be consented to by all the members of a private company.
  5. Amendment of Articles of a public company for the entrenchment of any Provisions.
  6. Modification in name of the company to be sanctioned by a special resolution.
  7. If a company has raised funds from the public through the issue of a prospectus, and the money so raised remains unutilized, the company is not entitled to change the object for which the money was raised, except by passing a special resolution.
  8. A company is not authorized to modify the terms of a contract referred to in the prospectus or objects for which the prospectus was issued, except on the approval of the concerned authority.
  9. A company is entitled to pass a special resolution in its general meeting, issue depository receipts in any foreign country in a specified manner, in compliance with the pertinent conditions.
  10. If a shared capital of the company is classified into various classes of shares, the rights attached to the shares of any class may be modified with the written consent of the authorized shareholders; or through a special resolution passed at a meeting of the shareholders of the issued shares of that class.
  11. Private offer of companies needs the consent of the company by a special resolution.
  12. Issue of ‘Sweat Equity Shares”.
  13. Reduction of share capital.
  14. Special resolution for endorsing scheme for the purchase of fully-paid shares for the welfare of the employees.
  15. Buyback of shares.
  16. A company is authorized to issue debentures with an option of converting these debentures into shares, either wholly or partly during the stage of redemption; on the condition that the operation is sanctioned by a special resolution passed at the general meeting.
  17. Maintain registers at any other Indian locality.
  18. Re-appointment of Independent Director.
  19. The members of a company are empowered to specify any lesser number of companies in which the directors of the company may act as directors. The specification can only be done after the process of approval through a special resolution.
  20. To sell, lease or dispose of the whole or the majority of the undertakings of the company.
  21. To invest the compensations received by the company due to any merger or amalgamation in trust securities.
  22. To borrow money, where the prospective borrowable amount, as well as the money previously borrowed by the company exceeds the aggregate of its paid-up share capital and free reserves, barring the temporary loans obtained from the company’s bankers in the normal course of business.
  23. To remit, or grant time for the repayment of any debt owed by the director.
  24. To approve a scheme for providing loans to MD or WTD.
  25. Loan and investment by the company which is above 60% of paid-up share capital or 100% of the free reserve,
  26. Recruitment of a person as Managerial Personnel, given that his/her age is above 70 years.
  27. Remuneration to managerial personnel in the event of insufficient profits.
  28. Special resolution for closure of the company by Tribunal
  29. Special resolution for closure of the company.
  30. Conversion of a private limited company into a Person Company.

Annexure C – Ordinary Resolutions

This annexure should be inclusive of the following ordinary resolutions:

  1. Change of name as per the discretion of the Registrar if the application for reservation of name was applied by using incorrect information.
  2. Change of name as per the discretion of the Central Government.
  3. Issue of equity shares with differential rights needs to be endorsed by an ordinary resolution passed at a general meeting held by the shareholders.
  4. A company is entitled to increase or consolidate its capital, or on the other hand, increase or consolidate its capital, or sub-divide or cancel shares that haven’t been taken, provided that such action is endorsed by its Articles.
  5. A private company is not vested with the rights to offer shares to employees under a scheme of employee’s stock option, except on the consent of the shareholders through a special resolution.
  6. To transact the consideration of financial statements and the reports of the Board of Directors and Auditors, declaration of dividends, the appointment of new directors in place of the retiring ones, and determining the remuneration of the auditors in the Annual General Meeting under a special resolution.
  7. Approval of general meeting for the issue of bonus shares.
  8. Approval of general meeting for encouraging deposits from members.
  9. Appointment of auditors.
  10. Appointment of branch auditors.
  11. Appointment of independent director.
  12. Appointment of a director by small shareholders.
  13. Appointment of directors at the initial general meeting or on the proposal of a person with a deposit of Rs 1,00,000.
  14. Remuneration of cost auditor will be set by an ordinary resolution at the general meeting.
  15. Ordinary resolution for entering a specified contract or arrangement with the concerned party, for Companies with prescribed paid-up capital, or for transactions that exceed the prescribed amount.
  16. To mention any non-monetary transactions wherein the directors of the company or holding, subsidiary or associate company are involved.

 

Time-Period for MGT-14

E-Form MGT 14 needs to be filed with the ROC within 30 days from the date of passing of the resolution or formulating the agreement.

 

Failure of filing MGT-14

Failure or delay in MGT-14 attracts a penalty as follows

Defaulting party Penalty
Company Minimum: Rs 1 lakh
In case the failure continues after the first one: Rs 500 for each day
Maximum: Rs 25 lakh
Every officer in default(including the liquidator of the company) Minimum: Rs 50,000
In case the failure continues after the first one: Rs 500 for each day
Maximum: Rs 5 lakh