What is Form MGT 14? – Types of Resolutions

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Types of resolutions to be filed in Form MGT 14 Under Companies Act, 2013

Introduction

The Companies Act of 2013 created Form MGT 14 with the goal of submitting certain decisions to the Registrar of Companies (ROC). Such resolutions must be filed when the Creditors/ Shareholders/Board of Directors of the company have approved them at a meeting. The resolutions to be filed in Form MGT 14 are the subject of this article.

What is MGT 14 Form?

A copy of every Agreement signed and Resolution passed, as well as the Explanatory Statement under Section 102, must be lodged with the Registrar of Companies India, according to Section 117 (3) of the Companies Act 2013.

Furthermore, firms must file these resolutions under MGT 14 Form with the appropriate fees within 30 days of passing them.

As a result, under the Companies Act 2013, Form MGT-14 was created to provide a framework for directors to file resolutions made at various Board Meetings.

Purpose of MGT 14 Form

The main purpose of Form MGT 14 is to file resolutions. Here, the phrase “Resolutions” refers to the choices made by the Company’s Shareholders, Directors, and Creditors at various Board Meetings. The Registrar of Companies in India requires a Liquidator or Company to file the details of the decisions and agreements made in such meeting via E Form MGT 14 to register Resolutions and Agreements.

MGT 14 for Private Limited Companies

Resolutions made under Section 179(3) of the new Companies Act, 2013, i.e. Board powers to be exercised at the Board meeting, are not required to be filed by Private Companies. As a result, Private Company are no longer required to file e-form MGT-14 with the ROC on all 13 instances when the Board exercises its powers under Section 179(3) and Rule 8 of the revised Companies (Meetings of Board & its Powers) Rules, 2014.

It primarily gives Private Companies relief from related-party transactions among private holding-subsidiaries, as well as the ability to have their own class of capital and voting rights. Under Section 62 of the new Company Act 2013, it has given certain relief to the Private Limited Companies and deleted certain procedures for accepting deposits from members, as well as certain general meeting compliances for Private Companies.

List of Resolution under MGT 14 Form

Ordinary Resolution

A simple majority is required to pass an ordinary resolution. If the number of votes cast in its favor (including the chairman’s casting vote, if any) at a general meeting exceeds the number of votes cast against it than a resolution is passed. If a meeting has been scheduled within 21 days’ of notice, than in that case Voting will be done with the show of hands or a poll voting. The following matters are generally addressed in the ordinary resolutions:

Details on deposits from the public that are accepted.

Representation at any creditors’ meeting.

A statutory auditor maybe appointed by anyone other than a retiring auditor.

Removal of a director before his term of office expires.

Representation of corporations at the company meetings.

If it is discovered that the name was applied for by providing false information, the company must change its name after receiving direction from the registrar.

If the name/trademark is too similar to an existing company name/registered trademark, the company must change its name after receiving direction from the Central Government.

Dissolution following consideration of the Company Liquidator’s report.

The voluntary dissolution of the company as a result of the expiration of its duration or the occurrence of any event for which the articles provide that the company be dissolved.

Entering into a contract with a related party if the company has prescribed paid-up capital or the transaction amount exceeds the prescribed amount.

The board delegated the powers specified in Section 179(3) clauses (d) to (f).

Information on a managing director/full-time director/manager is appointed.

Granting a permission to the director of the company, holding, subsidiary, or associate company authorization to engage in non-cash transactions.

Board Resolution

Matters such as authorization of buy-back of securities as given under section 68 of the Companies Act, 2013 need to be included in the Board resolution. Apart from that, the following matters also need to be addressed:

Issuing securities in or outside of India, including debentures.

Details related to obtain a loan for company.

Approval of the financial reports and board reports.

To expand the company’s operations.

Information on the merger, acquisition or amalgamation of a business.

Permission to make political contributions.

Examination of the subsidiary’s books of accounts and other records.ist Item

Taking over a company or obtaining a controlling stake in another.

The company makes an investment or provides a loan/guarantee/security.

Contract/agreement between related parties.

Appointment of a company’s full-time key management personnel.

Appointment as managing director of a person who is also the manager/managing director of another company.

Self-prospectus approval.

Appointment/re-appointment/renewal of appointment/variation of appointment terms of a managing director

Calling in the unpaid amount on the shareholders’ shares.

Special Resolution

A special resolution is one that is passed by a 75 percent majority, which means that the number of votes cast in favour of the resolution is at least three times the number of votes cast against it, either by a show of hands or a poll conducted in person or by proxy. The intention to offer a resolution as a special resolution must be made clear in the general meeting notice. Generally, The following matters are addressed in the special resolutions:

Information on the company’s affairs that ought to be investigated.

Application to the registrar to have a name removed from the register. Item

Scheme involving the merger of sick companies with any other company.

The tribunal’s dissolution of a company.

The company’s voluntary dissolution.

To give the liquidator the authority to accept shares, etc. as payment for the sale of a property.

Approval for the binding arrangement between the company about to be wound up and its creditors.

Giving the company liquidator permission to exercise certain powers.

Disposal of the company’s books and documents when the company has been completely wound up and is about to be dissolved.

Change of registered office from one city in the same state to another.

Changes to the Memorandum of Association.

If the funds raised are not used, the object will be changed.

Changes to the Articles of Association.

Variation in the terms of a contract or the prospectus’s objects.

The issuance of depository receipts in any foreign country.

Changes in shareholder rights.

Sweat equity shares are issued.

Employee stock options are granted.

A private securities offering.

Debentures or loans with a share conversion option are issued.

Share capital is being reduced.

Employees benefit from the purchase/subscription of fully paid shares.

Information on the buyback of shares.

Otherwise investing in trust securities, the amount of compensation received as a result of an amalgamation or merger.

Borrowing money, other than temporary loans obtained from the company’s bankers in the ordinary course of business, where the amount to be borrowed plus the amount already borrowed by the company exceeds the aggregate of its paid-up share capital plus free reserves.

Allow time for the repayment of a director’s debt.

Scheme for lending to directors.

Keeping registers in locations other than the registered office in India.

Auditor is removed before the term expires.

More than 15 directors have been appointed.

Independent Director is reappointed.

Limiting a director’s number of directorships.

A company’s loan and investment that exceeds 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 greater.

Appointment of a director, that is, a managing director/full-time director/manager over the age of 70.

Penalty for late filing of Form MGT-14

The following penalty will apply if the Resolution or Agreement required by Section 117, subsection (1), is not filed with an additional filing fee before the time frame specified in Section 403.

If a defaulting party is a Company:

Minimum penalty is INR 1 Lakh and

If the failure occurs again after the first penalty, there will be a daily charge of INR 500 each day up-to INR 25 Lakh.

If a defaulting party is an officer of a company (including a liquidator of a company):

Minimum INR 50,000

If the failure occurs again after the first penalty, there will be a daily charge of INR 500 for each day up-to INR 5 Lakh.

Conclusion

The Companies Act of 2013 established Form MGT 14 to provide a framework for directors to file resolutions approved at various Board Meetings. Sections 94 (1) and 117 of the Companies Act 2013 govern this form. A Company must also file Form MGT 14 within 30 days of the resolution’s passage or the agreement’s signing.

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