All Indian companies are required to adhere to various statutory filing requirements in accordance with the Companies Act, 2013, promoting transparency, accountability, and regulatory oversight. These filings are done with the Registrar of Companies (RoC), a department of the Ministry of Corporate Affairs (MCA).
Companies are mandated to file forms and returns relating to incorporation, financial statements, annual returns, decisions of the board and shareholders, changes in the structure of the company, and other significant events.
Timely and correct RoC filing allows a company to maintain its legal existence, prevent penalties, and establish confidence in stakeholders, i.e., investors, creditors, and regulatory bodies, and hence facilitate effective corporate governance.
What is Form MGT-14?
Form MGT-14 is a form of requisitional document under the Companies Act, 2013, wherein Indian companies are required to file it with the Registrar of Companies (RoC) in order to publicise certain decisions and agreements. This legal document provides transparency and adherence to legal requirements regarding decisions made by a company’s board or shareholders.
Form MGT-14 must be filed in the event of a company passing resolutions such as special resolutions, particular board resolutions as stipulated under Section 179(3), or making contracts subject to being registered as per Section 117(3) of the Act. Some of the examples include Memorandum of Association (MOA) and Articles of Association (AOA) changes, change of registered office, approving mergers, and borrowing beyond such amount.
The form is to be filed within 30 days once the resolution has been passed or the agreement has been signed. Companies are required to file Form MGT-14, accompanied by certified copies of the resolution or agreement, explanatory statements, and other documents wherever applicable.
Non-compliance could result in huge financial fines for the company and its directors. Submission of Form MGT-14 is very significant in confirming the legal validity of certain significant corporate decisions, as well as stringent corporate governance guidelines as enshrined in Indian company legislation.
List of Resolutions Under Section 117(3) Of Companies Act 2013
Section 117(3) of the Companies Act, 2013 provides that certain resolutions and agreements must be filed with the Registrar of Companies (RoC) on Form MGT-14 within 30 days from their passing or signing.
1. Special Resolutions
Such resolutions are approved by shareholders who constitute at least a 75% majority. Examples are alterations to the Memorandum of Association (MOA) or Articles of Association (AOA).
- Expansion of the registered office outside municipal boundaries.
- Changes in a company’s objectives.
- Reduction of share capital.
- Authorisation for the purchase of securities by repurchase.
- Issuing sweat equity shares.
- Sanction for employee stock option plans (ESOPs).
- Change of the registered office from one state to another.
- Conversion of a private company into a public company and vice versa.
- Voluntary winding up of the company.
2. Resolutions passed with the consensus of all members (unanimous consent)
In situations where all the members agree to a certain resolution or agreement in writing, it also needs to be filed, even though it has not been ratified through a formal meeting.
3. Resolutions or agreements as prescribed under the Articles of Association
If the Articles make it mandatory that any decision or agreement is to be filed with the RoC, MGT-14 is to be filed.
4. Board Resolutions Relating to Powers Under Section 179(3)
Board resolutions exercising certain powers under Section 179(3) have to be filed through MGT-14. These include:
- Making calls on shareholders in relation to unpaid share capital.
- Authorising the repurchase of securities.
- Issuing securities, such as debentures, both within and abroad.
- Borrowing money that is more than the paid-up share capital and free reserves (under Section 180).
- Investing company funds.
- Lending, giving guarantees, or providing security for loans.
- Sanctioning the financial statements and Board report.
- Diversifying the company’s business.
- Sanctioning amalgamation, merger, or reconstruction.
- Acquisition of a company or acquisition of a controlling interest.
Note: Most private companies are exempted from the obligation to file board resolutions under section 179(3) by MCA notifications.
List of Resolutions Filed in Form MGT-14
As per the Companies Act 2013, corporations need to use Form MGT-14 to register certain resolutions and agreements with the Registrar of Companies (RoC). The same is done to keep proper public records and follow legal requirements.
Here is a complete list of resolutions to be filed with the use of Form MGT-14, along with relevant information:
1. Special Resolutions [Sections 117(3) and 179]
Different Special Resolutions have to be submitted in different sections, which are:
- Alteration of the Memorandum of Association (MOA)
- Alteration of the Articles of Association (AOA)
- Shifting of the registered office outside local limits
- Change in the company’s objectives
- Issuance of securities through private placement
- Buy-back of shares
- Reduction of share capital
- Approval of a scheme of merger or amalgamation
- Shifting of the registered office from one state to another state
- Voluntary winding up of the company.
2. Board Resolutions (where required)
Though most board resolutions need not be filed, Section 179(3) requires the filing of the following:
- Summoning shareholders for unpaid shares.
- Approving buy-backs under Section 68.
- Issuing securities, such as debentures.
- Borrowing money over paid-up share capital and free reserves (Section 180(1)(c)).
- Investment of company funds
- Lending or giving guarantees
- Approving of financial reports and Board reports
- Diversification of the company’s business
- Approving amalgamation, merger, or reconstruction
- Acquiring control of another company.
(Note: Some private companies may be exempted from these regulations in some cases.)
3. Ordinary Resolutions (When Specifically Required)
While not all ordinary resolutions are to be filed, some cases require it:
- Appointment, re-appointment, or removal of directors in certain cases
- Fixing remuneration of managerial staff under Section 196, 19Approval of loans, investments, guarantees above limits under Section 186
- Related party transactions under Section 188 (if not approved by the Board only)
4. Resolutions Passed by Circulation
If certain key resolutions are passed by circulation and not during a meeting, filing may still be required, especially for resolutions defined under Section 179(3).
5. Agreements
Apart from resolutions, decisions impact the firm as determined by the Board or shareholders, e.g., joint ventures or strategic partnerships, which are required to be registered under legislation.
Due Date of Form MGT-14
As per Section 117 of the Companies Act, 2013, Form MGT-14 has to be filed with the Registrar of Companies (RoC) within 30 days of the adoption of a resolution or signing of an agreement requiring such filing. The time period is strictly applied for both special resolutions and certain board resolutions listed in Section 179(3).
Failure to file within the specified time can result in further fines and penalties under the Companies (Registration Offices and Fines) Rules. The 30-day period shall be reckoned from the date the resolution is actually passed in the board meeting, general meeting, or through circulation, whichever mode the resolution follows. Procrastinating companies will not only be fined but also struggle with compliance. It should be noted that private limited companies are exempt from the requirement to file some board resolutions under the Act if they fulfil certain conditions.
Consequences of Non-Compliance with Form MGT-14
Delay in Form MGT-14 filing attracts monetary penalties and compliance consequences on the company and its officers under Section 117 of the 2013 Companies Act 2013. Late filing of Form MGT-14 not only involves hefty penalties but also creates a legal disadvantage for the company, along with damaging its image. Deadlines lie in upholding corporate governance standards and avoiding profitability implications.
1. Monetary Penalties [According to Section 117(2)]
For the company:
- Minimum penalty of ₹1,000,000.
- The default is ₹500 per day, with a maximum of ₹25,00,000.
For defaulting officers, such as directors and company secretaries:
- Minimum penalty of ₹50,000.
- The default is ₹500 per day, with a maximum of ₹5,00,000.
2. Further charges for delayed filing
The later it is filed after the deadline, the greater are the additional charges laid down in the Companies (Registration Offices and Fees) Rules, 2014. The longer the delay, the greater the multiplying factor of the normal filing fees.
3. Extra charges for late filing
Even if the form is filed beyond the deadline, more fees are charged depending on the length of the delay, according to the Companies (Registration Offices and Fees) Rules, 2014. Delays could lead to multiples of the normal filing fees.
Consequences of non-compliance
- Failure to file resolutions when required will render actions taken invalid. For example, amendments to the MOA/AOA may be ignored by authorities.
- Disqualification of directors: Continuing non-compliance can result in disqualification under Section 164 of the Companies Act, 2013.
- Concerns regarding company status: Non-compliance can lead to the company being listed as a defaulting entity in MCA records, having a negative impact on its reputation and raising capital or taking loans.
Conclusion
Form MGT-14 is essential to achieving legal compliance and corporate transparency under the Companies Act, 2013. It is the formal record of material decisions of a company’s board or shareholders, particularly special resolutions, board resolutions under Section 179(3), and material agreements.
The filing of this form within 30 days prevents companies from paying heavy fines and enjoying a clean compliance certificate with the Registrar of Companies (RoC).
Complete understanding and compliance with MGT-14 rules are a sign of a company’s commitment to legal compliance and enhance its credibility with regulators, investors, and stakeholders.
