Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Thursday, March 19, 2015

Consequences of Late Filing of Form MGT-14 and Condonation of Delay

As per Companies Act, 2013 it is mandatory for companies to inform the MCA about certain activities. Special Resolutions passed in the companies shall be filed with MCA in Form MGT-14, in which certified copies of such resolutions are to be attached.

Section 117 of the Companies Act, 2013 states that a copy of every resolution or agreement proposed in the meeting needs to be filed with the ROC within 30 days of passing the resolution.

List of resolutions to be filed with Form MGT-14 is divided in 4 categories:

  1. Under Section 117(3)
  2. Under Section 179(3)
  3. Provided as per Rule 8
  4. Miscellaneous Provisions

A detailed list of resolutions to be filed in Form MGT-14 is given here.

Filing of form MGT-14 is mandated by Section 117 of the Companies Act, 2013. Section 117(2) prescribes the penalty for non-filing of Form MGT-14. 

As per Section 117(2), if a company fails to file the resolution with Registrar of Companies within 30 days of passing resolution, the company shall be punishable with additional fees and fine as follows.

Additional Fees

The following table of additional fees shall be applicable for delays in filing of the form other than for increase in Nominal Share Capital.

Period Of Delay
Additional Fees
Upto 15 days (Sections 93, 139 and 157)
Equal to normal filing fees

More than 15 days and upto 30 days (Sections 93, 139 and 157) and upto 30 days in remaining forms.
2 times of normal filing fees

More than 30 days and upto 60 days
4 times of normal filing fees

More than 60 days and upto 90 days
6 times of normal filing fees

More than 90 days and upto 180 days
10 times of normal filing fees
More than 180 days and upto 270 days
12 times of normal filing fees
Note:
  1. Additional Fee or Late Filing Fee or Penalty is to be paid based on the number of days' delay in filing of Form MGT-14.
  2. Additional Fee is required to be paid with normal filing fees.
  3. For delay beyond 270 days, the second proviso to sub-section (1) of section 403 of the Act may be referred.
Penalty

If company fails to file E-form within 30 days + additional 270 days (total 300 days), then provision of Section 403(2) will be applicable.
  • The company shall be punishable with fine which shall not be less than Rs. 5,00,000 but which may extend to Rs. 25,00,000, and
  • Every office of the company who is in default, including liquidator of the company, if any, shall be punishable with fine which shall not be less than Rs. 1,00,000 but which may extend to Rs. 5,00,000.
But there is a way to save the company from a penalty of Rs. 5,00,000...

Compounding/Condonation of Delay under Section 460

Where any document or application required to be filed with the Registrar is not filed within the time specified, and a company has passed Special Resolution or Board Resolution but failed to file e-form MGT-14 in this respect beyond 300 days, it needs to file application for condonation of delay in FORM CG-1. The fees for condonation of delay is required to be paid with additional fees while filing the e-form MGT-14.

Two-step Process for Filing of Form in case of Delay beyond 300 Days

If Company fails to file MGT-14 within 300 days from the date of passing of resolution then following steps are to be followed:

Step 1: Authorize any Director or Secretary of the company in a Board Meeting to make application with Central Government u/s 460 for condonation of delay of filing of resolution. Prepare and submit an application for such condonation mentioning the facts of the resolution and the reason for non-filing within the stipulated time. Such an application shall be signed by any two Directors of the company.

Step 2: File Form CG-1

1 comment:

  1. whether Condonation is for comapny or for director or for both.

    ReplyDelete