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Query on MGT-8 & certification by CS in MGT-7

Abhijit Ghosh (.) (618 Points)

03 October 2015

Dear Valued Members,

A Unlisted Limited Company having Auth Capital- 1.5Crore, Paidup capital of Rs. 50 Lakhs & Turnover-Rs. 9.71 crore.

Kindly advice whether this company need MGT-8 by PCS or any certification from PCS.

Advance thanks to all.

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18 Replies

GOpal Rathnam (CS) (266 Points)
Replied 04 October 2015

Yes please. In my opinion, MGT 8 is required, RULE 11 has 3 THRESHHOLD limit requairing filing of MGT-8

(1) every listed company

(2) or a company having paid-up share capital of ten crore rupees or more or

(3) Turnover of fifty crore rupees or more

Regrds-Gopalrathnam

3 Like

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CA. Abhishek K. Pandey (Manager (Advance)) (901 Points)
Replied 04 October 2015

Dear Sir, But, in this case Company doesn't fall in any of those 3 criterion.

Originally posted by : GOpal Rathnam
	Yes please. In my opinion, MGT 8 is required, RULE 11 has 3 THRESHHOLD limit requairing filing of MGT-8 (1) every listed company (2) or a company having paid-up share capital of ten crore rupees or more or (3) Turnover of fifty crore rupees or more Regrds-Gopalrathnam

1 Like

Abhijit Ghosh (.) (618 Points)
Replied 04 October 2015

Whether the above crieteria is applicable for Private Limited Company too. Kindly advice.

CS Kanchan (CS) (37 Points)
Replied 04 October 2015

Yes Second and third criteria is applicable for pvt. Co also but in your case MGT-8 will not be required.

1 Like

Amita Panchal (Service in Finance) (46 Points)
Replied 05 October 2015

What about application to a bank financial will this rule be applicable

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Amita Panchal (Service in Finance) (46 Points)
Replied 05 October 2015

What about application to a bank financial will this rule be applicable

prakash (Company Secretary) (1352 Points)
Replied 05 October 2015

This Rule is applicable to all the companies being it is banking, NBFC or Housing Company, if it meets criteria spitpulated in provisions.

Charu Srivastava (Company Secretary) (4210 Points)
Replied 05 October 2015

Hi Abhijit,

Annual Return Certfication is not required in your case.

This provisions is applicable to all the Companies, hence NBFC and Banking will have to adhere to it.

2 Like

GOpal Rathnam (CS) (266 Points)
Replied 05 October 2015

1. I read it as listed company by mistake. 2. MGT8 is required even for private companies 2 and 3 threshold limit indicated in my note Regards gopal rathnam

2 Like

Vaiyapuri kannan (V.P.FINANCE & COMPANY SECRETARY) (274 Points)
Replied 19 November 2015

If the intention of Govt is to make the private companies also to file MGT 8 , the two limits ( paid up capital of Rs.10 cr or sales of Rs.50Cr) would have been re -drafted after incorporating loan or borrowings from banks andf other financial institutions as an additinal sub limit , Because unless or otherwise the private limited companies utilise the public money either directly or indirectly via banking loan , the necessity of certification of Annual return by PCS as to ensure authenticity of info contained therein would not be necessary . The main purpose that to be served by such an authencity through a certification by PCS ( MGT8) would be as to ensure the accuracy & correctness info furnished in the Annual return in the best interest of shareholders of large big companies including listed companeis , but the shareholders of private limited would not mind about the info contained in the Annual return because filing of Annual return by these private companies would be one more formalities as to match the requirement of laws ,and nothing beyond that . So the law makers have to realise the real purpose that to be served by making the private limited companies to comply with this kind of unnecessary formalities . If the Govt really wants to ensure minimum life guarantee to these PCS , it has to think over some other better ways to use these professionals those who are always looking for some kind of favor from govt by putting pressure to Govt as make some unnecessary compulsory provisions in the company Act .

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Vaiyapuri kannan (V.P.FINANCE & COMPANY SECRETARY) (274 Points)
Replied 19 November 2015

How could you say this MGT -8 is also applicable for private limited companies by merely reading out the available words in the Acts. If the Govt really wants to make the Pvt limited companies also liable to file MGT-8 with MCA , the existing two creterions of paid up capital of Rs.10 Cr and Sales of Rs.50 Cr would have beeen supplemented by another sub limit with ref to Banking loan from financial institutions or public deposit accepted by these private companies ., . So most of the professionals are making their points merely based on exact words used by the law makers without getting into the real purposes that to be served by those compulsory provision in the Act

Vaiyapuri kannan (V.P.FINANCE & COMPANY SECRETARY) (274 Points)
Replied 19 November 2015

Whenever a practising member is called for to certify the statutory records of company as to comply with provisions of law , Now -a days it is a fashion for those practising members both CA and CS to have one undertaking from the company concerned signed by the responsible officers , may be from the directors of company , without thoroughly checking the the basic documents and records of the company . This trend would further lead to big image fall among the society

Vaiyapuri kannan (V.P.FINANCE & COMPANY SECRETARY) (274 Points)
Replied 19 November 2015

Technically speaking there would not be any necessity to have MGT 8 Certificate from a PCS by all private limited companies because the section 92 and the relevant applicable rules says that the annual return of the listed companies and other companies fuffilling the condition of having minimum 10 Cr or more paid up capital or minimum turnover of Rs.50cr or more shall be certified by the PCS but there is nothing like any limit in the nature of bank loan from financial institution or acceptance of public deposit from public, so the Govt does not have any intention to make the private comapnies also to comply with MGT 8 because if it had any intention to keep the private companies also in this category , an additional minimum stipulation for banking loan or deposit from public would have been prescribed by it.