Form MGT 14, introduced by the Companies Act of 2013, serves as a way to officially share specific decisions with the Registrar of Companies (ROC). These decisions are required to be filed once they are agreed upon in meetings involving the company’s creditors, shareholders, and board of directors. In this article, we’ll explore the purpose and usage of Form MGT 14, detailing the resolutions that need to be filed using this form.
What is Form MGT 14?
Form MGT 14, as per Section 117 (3) of the Companies Act 2013, is a document used to submit copies of signed agreements, adopted resolutions, and explanatory statements under Section 102 to the Registrar of Companies in India. Within 30 days of passing these resolutions, companies are obligated to file them using Form MGT 14, along with the required fees. The creation of Form MGT-14 under the Companies Act of 2013 aimed to provide a structured way for directors to report resolutions decided upon during various Board Meetings.
Using Form MGT 14:
Form MGT 14 primarily serves the purpose of filing resolutions. In this context, “resolutions” refer to decisions made by a company’s shareholders, directors, and creditors during different Board Meetings. When a company or liquidator takes part in such meetings and agreements are reached, they must use Form MGT 14 to convey these decisions and agreements to the Registrar of Companies in India. This is important for the proper registration of resolutions and agreements.
Types of Resolutions in Form MGT 14:
1. Ordinary Resolution:
An ordinary resolution requires approval by a simple majority, meaning more votes in favor than against, including the chairman’s optional casting vote. Such resolutions cover various matters, including:
– Information about accepted public deposits.
– Participation in creditor meetings.
– Changing the company’s name when advised by the Central Government.
– Removing a director before their term ends.
– Representing the company at meetings.
– Altering the company’s name based on registrar assistance.
– Dissolution after considering the Company Liquidator’s report.
– Appointment of a statutory auditor by a person other than the retiring auditor.
– Granting authority as per Section 179(3) clauses (d) to (f).
– Appointment of a managing director/full-time director/manager.
– Allowing company entities to engage in non-cash activities.
– Voluntary dissolution due to specified events.
2. Special Resolution:
A special resolution requires approval by 75% of present and voting members, with at least three times as many votes in favor as against. These resolutions pertain to matters like:
– Significant business decisions.
– Deleting a name from the register.
– Amalgamation of failing businesses.
– Tribunal-based dissolution.
– Disposal of company records during dissolution.
– Changing the registered office’s state.
– Voluntary business closure.
– Empowering the liquidator to accept assets as payment.
– Approving binding agreements between creditors of a dissolving company.
– Providing specific powers to the company’s liquidator.
– Altering the Memorandum of Association.
– Modifying object clauses due to unutilized funds.
– Changing articles of association.
– Adjusting contract conditions or prospectus aims.
– Issuing depository receipts in foreign countries.
– Modifying shareholder rights.
– Issuing shares of sweat equity.
– Granting employee stock options.
– Privately placing securities.
– Loans/debentures with a share conversion option.
– Reducing share capital.
– Employee benefits from share purchase/subscription.
– Details about share repurchases.
– Remuneration due to mergers, acquisitions, or investing in trust securities.
– Extending the director’s repayment period.
– Director borrowing arrangements.
Resolutions like Section 68 approval for share buyback are covered by Board resolutions. Other issues addressed include:
– Issuing securities, including debentures.
– Securing loans for the company.
– Approving financial and board reports.
– Expanding business operations.
– Mergers, acquisitions, and fusions.
– Controlling share acquisition.
– Reviewing subsidiary financials.
– Political contributions.
– Approving one’s own proposal.
– Appointing, renewing, or altering a managing director’s role.
– Claiming balance on shareholders’ shares.
– Company financial commitments, loans, guarantees, and securities.
– Contracts/agreements between parties.
– Appointing key management individuals.
– Appointing a management or managing director from another organization.
Summary: Form MGT 14, shaped by the Companies Act of 2013, serves as a vehicle for directors to report resolutions adopted in various Board Meetings. It operates under Sections 94 (1) and 117 of the Companies Act, 2013. Companies must submit Form MGT 14 within 30 days of resolution approval or agreement signing, ensuring compliance with regulations and maintaining transparency in corporate decision-making.