MGT 3, MGT 14 are revised.
What is MGT-14? This is the first question in our mind. The Ministry of Corporate Affairs (MCA) regulates all the administrative work of the corporate sector of the country. There are various rules and regulations for all the companies, whether private or government, and the firm follows those rules in every context. The form was one of the measures to allow the companies’ better functioning. Many malpractices and issues are regularly highlighted in the industries among the owners or shareholders regarding implementing many changes or resolutions. To avoid these things, MCA form MGT-14 comes in use.
To run a company or a business, many necessary changes must be made at a time. These changes are decided in the meetings of the shareholders. The registrar is required to use the form and fill it out.
Did you know?
MGT-14 must be furnished through the firm within the Registrar of Companies under sections 94(1) and 117(1) under the Companies Act 2013.
What is MGT-14 Form?
MGT-14 is a form that came into existence after introducing the amendments in the Companies Act of 2013. The form is the way to make resolutions in the companies. The new changes must be filled in the form by the registrar, which is made in meetings of the board members. However, we need to take the approval of all the company board members to fill a resolution. The resolution must be filled as its type. Moreover, private companies are not required to go as the rules of the government companies.
Purpose of MGT-14 Form
registrar of the companies fills the MGT-14 as per the rules mentioned in sections 117(1) and 94(1) of the new Companies Act 2013. The purpose is to mark the resolution or agreement made in meetings of the board of directors, shareholders or creditors by a liquidator or Registrar of Companies (RoC) in form MGT-14. The objective introduced was to fill certain major resolutions with the company registrar. It is an e-form. Moreover, there are various categories for filling the resolutions. The different categories are board resolutions, special resolutions, and ordinary resolutions. The registrar only fills the MGT-14 form after approval from all board members. However, there are many paper works and documents required to fill it. Companies are also charged with form fees. Moreover, they fail to file resolutions, or the registrar does not do it through the proper legal process. The government had provisions for the penalty on the companies.
List of Resolutions Under MGT-14 Form
The MCA form MGT-14 has 3 types of resolutions: board resolutions, special resolutions, and written resolutions. All the resolutions must be filled according to the categories under which it comes. The registrar of the company needs to file resolutions within 30 days of passing the resolution or agreement being made. Otherwise, the institution will face a penalty.
At least 75% of the board directors have to approve to pass the board resolutions. The shareholders’ signatures are also required on the agreement made. All the details of the board resolutions must be filled in Annexure A of MGT-14. The area which comes under board resolutions are as follows:
- The account data of the company and other records.
- Suppose the company wants to make any political contribution, granting a loan, making a guarantee, or providing security. Moreover, the company will fill the resolutions of making any investment.
- To make any transaction contracts with related parties.
- Appointing personnel for a full-time managerial post. While appointing a new managing director at the same post in another firm.The variation in terms of the appointment of a managing director.
- To buy back securities and to issue securities in any foreign countries.
- To ask for a loan and verification of the firm’s financial statements.
- Moreover, this section also covers the issues related to expanding the business, mergers, separation, and acquiring a new firm.