All about MGT-14: Filing of special resolutions to the ROC

MGT-14 needs to be Filed by a Company with the Registrar of Companies (RoC) in accordance with section 94(1) and 117(1) of the Companies Act 2013 and the rules made thereunder.

However, the private companies are exempted from filing Board Resolutions. Private companies are not required to file MGT-14 for matters specified in section 179(3) of the Companies Act 2013 read with rule 8 of the Companies (Meetings of Board and its Powers) Rules 2014. Thus, private companies do not have to file e-form MGT-14 with the RoC on the exercise of powers of the Board under the provisions of Section 179(3) of the Companies Act 2013.

Purpose of Filing

Meetings of the Board of Directors/Shareholders/Creditors are held, and resolutions are passed at the said meetings. The resolutions have to be filed with the ROC by the company or liquidator as the case may be and such resolutions are filed in Form MGT-14.

Resolutions/Agreements to be Filed Under Section 117(3)

• Special Resolutions: Resolutions that 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)

List of Resolutions to be Filed in MGT-14, The list of resolutions filed in MGT-14 are listed under 3 categories as follows:

Annexure A - Board Resolutions

Under Annexure A, the following matters dealt with in the board resolutions needs to filed:

• Inspection of the books of accounts as well as the other records of the subsidiary.
• Authorisation for making political contributions.
• Making an investment or giving of loan/guarantee/security by the company.
• Related party transaction contract/agreement.
• Appointment of a whole-time key managerial personnel of a company.
• Appointment of a person as managing director if he is the manager/managing director of another company.
• Approval of self prospectus.
• Appointing/ re-appointing/renewing of appointment/variation of the terms of appointment, of a managing director.
• Calling of the unpaid amount on the shares from the shareholders.
• Authorisation of buy-back of securities as provided under Section 68.
• Issuing securities (including debentures) in India/outside India.
• To borrow money.
• Approval of the Board’s report and financial statements.
• To diversify the business of the company.
• To approve amalgamation, merger or reconstruction.
• Taking over a firm or acquiring the controlling stake in another firm.

Annexure B - Special Resolutions

Under Annexure B, the following matters dealt with in the special resolutions needs to filed: Insertion of a provision of entrenchment in Articles of Association by companies.

• Change of a registered office from one city to another in the same state.
• Alteration of Memorandum of Association.
• Change in the object in case the money raised is unutilized.
• Alteration of Articles of Association.
• Variation in terms of a contract or objects in the prospectus.
• Issue of the depository receipts in any of the foreign countries.
• Variation of shareholder rights.
• Issue of sweat equity shares.
• Issue of employee stock options.
• A private offer of securities.
• Issue of debentures or loans containing an option for conversion to shares.
• Reduction of share capital.
• Purchase/subscription of fully paid shares for the benefit of employees.
• Buyback of shares.
• Keeping registers at any other place in India other than the registered office.
• Removal of auditor before the expiry of the term.
• Appointment of more than 15 directors.
• Reappointment of Independent Director.
• Restricting the number of directorships of a director.
• Selling, leasing or otherwise disposing of the whole/substantially the whole of the undertaking of the company or in case the company owns more than one undertaking, of the whole or substantially the whole of any of such undertakings.
• Investing otherwise in trust securities, the amount of compensation obtained by it as a result of an amalgamation or merger.
• Borrowing money, where the money to be borrowed plus the money already borrowed by the company will exceed the aggregate of its paid-up share capital plus free reserves, other than the temporary loans obtained from the company‘s bankers in the ordinary course of business.
• Provide time for the repayment of debt due from a director.
• Scheme for providing loan to directors.
• Loan and investment by a company exceeding 60% of its paid-up share capital, free reserves and securities premium account or 100% of its free reserves and securities premium account, whichever is more.
• Appointment of a director, i.e. a managing director/whole-time director/manager above the age of 70 years.
• Affairs of the company ought to be investigated.
• Application to the registrar for removal of name from the register.
• Scheme relating to the amalgamation of sick companies with any other company.
• Winding up of a company by the tribunal.
• Voluntary winding up of the company.
• To provide the liquidator with the powers to accept shares etc. as consideration for the sale of a property.
• Approval for the arrangement between the company which is about to be wound up and its creditors to be binding.
• Providing sanction to the company liquidator to exercise certain powers.
• Disposal of books and paper of the company when the company is completely wound up and is about to be dissolved.

Annexure C - Ordinary Resolutions

Under Annexure C, the following matters dealt with in the ordinary resolutions needs to file:-

• Company to change its name after receiving direction from the registrar if it has been found that the name was applied to, by furnishing false information
• Company to change its name after receiving direction from the Central Government if the name/trademark is too identical to an existing company name /registered trademark.
• Acceptance of deposits from the public.
• Representation of Corporations at the meeting of companies.
• Representation at any meeting of creditors.
• Appointing any other person other than a retiring auditor as a statutory auditor.
• Removal of director before the expiry of the period of his office.
• Delegation of the powers by the board as specified under Section 179(3) clauses(d) to (f).
• Permission to enter into non-cash transactions to a director of the company/holding/subsidiary/associate company.
• Appointment of a managing director/whole-time director/manager.
• Dissolution after considering the report of the Company Liquidator.
• Voluntary winding up of the company as a result of the expiry of the period of its duration or on the occurrence of any event in respect of which the articles provide that the company should be dissolved.
• Entering into a contract with a related party in case of companies having prescribed paid-up capital or the amount of the transaction exceeds the prescribed amount.

Penalty Under Section 117

Failure to file the Resolution or the Agreement under sub-section (1) of Section 117 prior to the expiry of the period mentioned under Section 403 with an additional fee, the penalty shall be as below:

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

Time Limit For Filing MGT-14

As per Section 117(1), the company shall file the resolutions and agreements in form MGT-14 within 30 days from the resolution being passed or the agreement being entered into.

• Consequences of Failure to File MGT-14 Within 300 Days From Passing of Resolution: In such a case, the Company will not be able to file form MGT-14. Since MGT-14 requires details of SRN of INC-28 and INC-28 can be filed only after receiving an order of condonation. The power of condonation is assigned to the Ministry of Corporate Affairs. Below are the steps to be followed for condonation of delay:-
• The company will have to file form CG-1 with MCA for condonation in delay in filing form MGT-14. MCA shall levy a penalty in the condonation order, and the company shall be liable for the payment of such penalty. After receipt of order and payment of a penalty, the company shall file a copy of the order and penalty receipt in form INC-28 with ROC. The company shall then file e-form MGT-14 by mentioning SRN of INC-28.
• FILING OF E FORM MGT- 14 AS PER COMPANIES ACT 2013: Events Where E-Form MGT-14 to be Filed Under the Companies Act, 2013 for all Companies including Private Limited Companies and for Companies other than Private Limited Companies.

FOR ALL COMPANIES INCLUDING PRIVATE COMPANIES

FOR ALL COMPANIES OTHER THAN PRIVATE COMPANIES