MGT-14 and Private Limited Companies
Private Companies are easy to form and easy to operate
In order to boost startup industry and small scale businesses Indian government is announcing various schemes and holding various events for the advantage of new and young entrepreneurs. One of such steps is curbing of compliances for Private Limited Companies, so as to avoid hardships faced by new entrants with respect to basic legal procedures which are often missed due to lack of knowledge or money to hire professionals.
Today we will be discussing one of those very important and often missed compliance by new entrepreneurs w.r.t Private Limited Companies – Filing of MGT-14.
Private Limited Companies is one most used incorporation structures by professionals these days as it has minimum compliances / hassles with respect to disclosures of its various activities. In an ideal frame work, all the activities carried out by the any company in India must be disclosed in a specific format to MCA which will then be published for anyone to view. But incase of Private Limited Companies the mandatory set of such activities to be reported in a public forum is reduced to minimum catering only to some major modifications or decisions.
Following are the decisions that are required to be filed to ROC through MGT-14 (incase of Private Companies):
- No Ordinary or Board resolution is required to be filed under MGT-14 for Private Companies.
- Change of location of registered office in the same State, but outside the local limits of the city, town or village where it is currently situated
- Change of registered office from the jurisdiction of one registrar to another in the same state.
- Amendment of Articles of a private limited company for entrenchment of any provisions. This must be consented by all the members of a private company.
- Modification in name of the company to be sanctioned by a special resolution
- If a shared capital of the company is classified into various classes of shares, the rights attached to the shares of any class may be modified with the written consent of the authorised shareholders; or through a special resolution passed at a meeting of the shareholders of the issued shares of that class.
- Private offer of companies needs the consent of the company by a special resolution.
- Reduction of share capital.
- Buy back of shares.
- Maintain registers at any other Indian locality.
- To sell, lease or dispose the whole or the majority of the undertakings of the company
- To invest the compensations received by the company due to any merger or amalgamation in trust securities.
- To remit, or grant time for the repayment of any debt owed by the director.
- To approve scheme for providing loans to MD or WTD.
- Loan and investment by company which is above 60% of paid up share capital or 100% of free reserve,
- Recruitment of a person as Managerial Personnel, given that his/her age is above 70 years.
- Remuneration to managerial personnel on the event of insufficient profits.
- Special resolution for closure of the company by Tribunal
- Special resolution for closure of the company.
- Conversion of a private limited company into a One Person Company.
We have specifically enumerated only such matters which are to the concern of Private companies. There are other activities also which are required to be passed through Special Resolution and thus needs to be filed under MGT-14 but such activities are not applicable to Private Companies.
We sincerely hope that above list will assist entrepreneurs and even professionals as a quick reference guide to what all is applicable to be filed under MGT-14 from time to time.
You can anytime contact the author for any explanations required through Contact Us form on the website http://equible.in
All the above text is based on the authors viewpoint and knowledge and should not be treated as final legal wordings. Before taking any action based on the above text it must be thoroughly checked w.r.t. its applicability.
Author : Sukant Garg