An exhaustive explanation on FORM MGT-14

When a company is planning to start up, the first step is to incorporate the business with the Registrar of Company (ROC). Companies incorporate themselves with the RoC because it is the body governing the companies and has to mandatorily keep information about companies. Therefore, every company has to notify ROC about the significant steps taken by the company by passing any resolutions at the Board meeting or by entering into an agreement.

To keep the ROC informed, Section 117 of the Companies Act 2013 provides filing of resolutions after passing of the same in Board Meetings or Member Meetings.

1. What is it that needs to be filed under Section 117?

Whenever a company passes any resolution or enters into an agreement, then the company needs to file a copy of that resolve with the ROC before the end of the 30 days after the resolution or agreement. This filing is mandatory as under Section 117.

2. Which type of resolutions are to be filed?

Not all resolutions and agreements need to be filed under Section 117. The section mentions the nature of resolutions and agreements which needs to be filed with the ROC.

• Special Resolutions: Any resolution which is needed to be passed as a special resolution to become effective and needs to be passed by all the members.
• Any resolution passed by the Board of Directors or any agreement that is entered into by the company to appoint, re-appoint or renew the appointment of a Managing Director or alter the terms of appointment of the Managing Director.
• Ordinary Resolutions: These type of resolutions include ordinary resolutions like change of name, auditor or issue of equity shares, etc. These are not required to be registered.
• When a company is to liquidate under section 59 of the Insolvency and Bankruptcy Code, 2016.
• An exception is that a banking company does not need to inform the RoC about resolutions which are passed to grant loans or give guarantees in the ordinary course of business.

3. What documents need to be filed with MGT-14?

The following documents need to be attached with MGT-14:

• A copy of the agreement entered for which the company is MGT-14
• An explanatory statement under section 102 of the Companies Act 2013
• A copy of the altered Memorandum of Association and Articles of Association (in case of any changes) after passing the resolve.

4. What details are needed in the form?

• Corporate Identification Number (CIN) of the company
• Name, address of registered office and email ID of the company will automatically be filled after entering the CIN.
• Date of dispatch of notice
• Date of passing of resolution
• Number of resolution(s) for which the form is being filed: The maximum a company can file is maximum 10 in one form.
• The company is required to provide the following details:
  • The system will automatically fill the section of the Companies Act, 2013 under which the resolution is passed depending on the purpose of passing
  • Purpose of passing resolution
  • Detail about whether the decision was passed by a postal ballot
  • The details about the authority which is passing this undertaking
  • If the resolution is passed as ordinary or special one or with requisite majority
• In case of alteration of object clause, whether there is any change in the industrial activity of the company.
• In case of voluntary winding up company, details like the mode of winding up, the date of commencement of the winding up and the name, PAN and address of the liquidator should be provided.
• Details of agreement
• Enter Service Request Number (SRN) of INC-28: The INC-28 form has to be registered in case there is a delay in filing the MGT-14 form to pass the intent for the alteration in the object clause.

5. What is the legal fee to be paid with Form MGT-14?

The legal fees to be paid along with MGT-14 is on the basis of the share capital of the company.

If any company does not have share capital, then the fee is Rs. 200.

6. Are there additional fees if there is any delay in filing the form?

Yes, there are additional fees calculated on the basis of the number of days delayed to file MGT-14.

7. What is the penalty, apart from the additional fee, in case of delay in filing of MGT-14?

If a company fails to file the MGT-14 with the ROC within 30 days of such decision, then the company is liable to pay Rs. 1,00,000 and if it further continues to not file MGT-14, then a penalty of Rs. 500 per day will be charged to the extent of Rs. 25,00,000.

Additionally, every officer of the company who is found to be defaulting will be liable to pay Rs. 50,000 and if the default continues, then a charge of Rs. 500 per day is levied to the extent of Rs. 5,00,000.

This is the in and out of why, what and how an MGT-14 form is filed.