MGT-14: Applicability in Different Cases
CS Rantu Das
CS Rantu Das is the Founder and Managing Partner of M/s. Rantu Das & Associates, a firm established in 2010. As a Fellow Member of ICSI and a law graduate (LL.B., LL.M.), with an M.Com from Calcutta University, he has over 13 years of expertise in corporate laws, SEBI matters, FEMA, RBI regulations, and compliance audits. He regularly represents cases before NCLT and NCLAT under the Companies Act, 2013, and IBC, 2016.
Introduction
Within India’s corporate compliance framework, documentation is as important as decision-making itself. Among the numerous forms that companies must file with the Registrar of Companies (ROC) under the Companies Act, 2013, Form MGT-14 plays a crucial role. It is used to file resolutions and agreements that require approval by a company’s board or shareholders. Although it may seem like just another statutory form, its applicability varies across scenarios, making it important for professionals, directors, and compliance officers to understand precisely when it is required.
What is Form MGT-14?
Form MGT-14 is an electronic form prescribed under Section 117 of the Companies Act, 2013, and governed by Rule 24 of the Companies (Management and Administration) Rules, 2014. Its primary purpose is to report resolutions and agreements passed by a company to the ROC within a stipulated time frame.
The form ensures transparency between companies and regulatory authorities by formally recording key decisions in the public domain.
Who Needs to File MGT-14?
Both public and private companies may be required to file MGT-14, but the scope differs:
1. Public Companies: A greater number of resolutions must be filed due to heightened public interest and disclosure requirements.
2. Private Companies: Certain relaxations have been granted, particularly following the Companies (Amendment) Acts, although some resolutions still require filing.
Resolutions Covered under Section 117
The Act specifies the categories of resolutions/agreements that need to be filed. Broadly, these are:
- Special Resolutions – These require at least 75% shareholder approval and must be filed regardless of company type.
- Certain Board Resolutions – Only those prescribed under Section 179(3) of the Act (for public companies).
- Resolutions agreed upon by any class of members – If binding on all members of that class.
- Resolutions requiring company law approval – Where prior sanction or post-facto reporting is necessary.
Cases Where MGT-14 is Applicable
Below are key scenarios where filing MGT-14 is required, along with distinctions for public and private companies.
1. Special Resolutions by Shareholders
These are resolutions passed at a general meeting with at least 75% approval. Filing MGT-14 is mandatory for both public and private companies. Examples include:
a. Alteration of Articles of Association (AoA)
b. Change in the name of the company
c. Shift of registered office from one state to another
d. Reduction of share capital
e. Issue of sweat equity shares
f. Buy-back of shares
2. Board Resolutions under Section 179(3)
For public companies, certain board decisions need to be filed via MGT-14. Private companies are exempt from filing these board resolutions, except when they also constitute special resolutions.
Examples of such board resolutions for public companies include:
a. Making calls on shareholders in respect of money unpaid on their shares
b. Authorizing buy-back of securities
c. Issuing securities, including debentures, in India or abroad
d. Borrowing monies beyond the paid-up capital and free reserves
e. Investing the funds of the company
f. Granting loans or giving guarantees
g. Approving financial statements and board reports
3. Resolutions Agreed by Class of Members
When a resolution affects only a specific class of shareholders (e.g., preference shareholders) and is agreed to by them, it must be reported.
Example:
Modification of rights attached to preference shares requires approval from the relevant class and subsequent filing of MGT-14.
4. Resolutions or Agreements Requiring Central Government, Tribunal, or Other Authority’s Approval
If a resolution requires the prior approval of a regulatory authority (e.g., the National Company Law Tribunal), such approval, along with the resolution, needs to be reported through MGT-14.
Example:
Approval for the scheme of amalgamation, merger, or demerger.
5. Alteration of Memorandum of Association (MoA)
Changes in MoA, such as:
a. Change in company name
b. Change in registered office from one state to another
c. Alteration of the object clause
d. Increase in authorized share capital (if not done through SH-7)
Each such alteration passed as a special resolution must be filed in MGT-14.
6. Alteration of Articles of Association (AoA)
Any change in AoA, whether related to company governance or shareholder rights, requires filing MGT-14.
Example:
Conversion of a private company into a public company or vice versa.
7. Approval for Borrowing Beyond the Limits under Section 180(1)(c)
If a company borrows money exceeding its paid-up capital, free reserves, and securities premium, shareholder approval via special resolution is required, and filing MGT-14 becomes mandatory.
8. Related Party Transactions (RPTs) under Section 188
For certain transactions exceeding the prescribed limits, shareholder approval through a special resolution is needed, and the same must be reported via MGT-14.
9. Approval for Managerial Remuneration Beyond Limits
When remuneration to directors, managing directors, or managers exceeds the limits prescribed under the Act, shareholder approval is necessary and must be filed.
Time Limit for Filing
MGT-14 must be filed within 30 days of passing the resolution or entering into the agreement.
Failure to comply may attract monetary penalties for both the company and the responsible officers.
Filing Procedure (Brief)
- Download Form MGT-14 from the MCA portal.
- Fill in company details – CIN, name, address, etc.
- Specify the resolution type—special, board, or other.
- Attach supporting documents – Certified copy of the resolution, explanatory statement, MoA/AoA copies (if altered), and approval letters from authorities, if any.
- Pay the prescribed fee based on share capital.
- Submit electronically using the DSC of a director/CS.
- Receive acknowledgment from ROC.
Exemptions for Private Companies
As per the MCA notifications and amendments:
1. Private companies are exempt from filing board resolutions under Section 179(3).
2. Only special resolutions and certain other shareholder resolutions need filing.
3. This relaxation reduces the compliance burden, although private companies must still monitor changes in law to avoid non-compliance.
Penalties for Non-Compliance
Failure to file MGT-14 within the prescribed time attracts penalties under Section 117(2):
1. Company: Penalty of ₹10,000 plus ₹100 per day of continuing default, subject to a cap.
2. Officer in default: Penalty of ₹25,000.
Given that these amounts can accumulate quickly, timely filing is crucial.
Conclusion
Form MGT-14 is not merely a bureaucratic step; it is a legal obligation that upholds transparency in corporate decision-making. While private companies enjoy some relief, public companies face broader applicability due to higher disclosure standards. Understanding which resolutions trigger the requirement to file MGT-14 helps avoid penalties, maintain good governance, and ensure smooth statutory compliance.
For professionals, the key lies in staying updated with amendments, carefully reviewing board and shareholder resolutions, and ensuring that any resolution falling under Section 117 is reported promptly to the ROC. In corporate law, missing a filing deadline may prove more costly than the time required to file it correctly.
For any clarifications or queries, please feel free to reach out to us at admin@fintracadvisors.com
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