Special Resolutions Under Companies Act, 2013: Filing of Form MGT-14

The Companies Act, 2013 (Act) was notified on 29^thAugust, 2013. Out of 470 sections in the Act, 283 sections and 22 sets of Rules corresponding to such sections have so far been brought into force. The Act and the related Rules contain a large number of provisions requiring approval of shareholders by way of special resolution.

In terms of the Act, for every Special Resolution passed, Form MGT-14 shall be filed by the company with the Registrar of Companies. Following are the matters for which Special Resolution is required to be passed under various provisions of the Act and hence the filing of Form MGT-14:

S. No.	Section of the Act	Particulars
1.	Section 5(4)	To amend Articles of Associationof a public limited company so as to insert entrenchment provisions
2.	Section 12(5)	To shift the registered office of a company outside the local limits of any city, town or village where such office is situated
3.	Section 13(1) & (8)	(1) To alter the provisions contained in Memorandum of Association of a company. (eg. – change of registered office form one state or union territory to another state, change of name)(8) To change the objects for which the money has been raised from public through prospectus and still has any unutilized amount out of the money so raised
4.	Section 14(1)	To alter the Articles of Association, including alterations having the effect of conversionof—(a) a private company into a public company; or(b) a public company into a private company
5.	Section 27(1)	To vary the terms of contract referred to in the prospectus or objects for which the prospectus was issued
6.	Section 41read with Rule 4(2) – Companies (Issue of GlobalDepository Receipts) Rules, 2014.	To issue depository receipts in any foreign country
7.	Section 48(1)	To vary rights attached to any class of shares
8.	Section 54 read with Rule 8(1) of Companies (Share Capital & Debentures) Rules, 2014	To issue sweat equity shares of a class of shares already issued
9.	Section 62(1)(b) read with Rule 12(1) of Companies (Share Capital & Debentures) Rules, 2014	To increase subscribed capital by issue of further shares to employees under a scheme of employees’ stock option
10.	Section 62(1)(c)	To increase subscribed capital by issue of further shares to any person other than existing members / employees for cash or consideration other than cash, if the price of such shares is determined by the valuation report of a registered valuer
11.	Proviso to Section 62(3)	To approve terms and conditions of issue of optionally convertible debentures or loan convertible into shares
12.	Section 63	Issue of bonus shares – (Form PAS 3 – Return of Allotment – Attachment – copy of special resolution authorizing issue of bonus shares)
13.	Section 66	To reduce share capital subject to the approval of the Tribunal
14.	Section 67(3)(b)	To approve any scheme for the purchase / subscription of fully paid up shares in the company or its holding company, if the purchase /subscription of the shares is held by trustees for the benefit of the employees or such shares is held by the employee of the company.
15.	Section 68(2)	To authorise the company to purchase its own securities (Buy – back)
16.	Section 71	To issue optionally convertible debentures with an option to convert whole or part of the debentures into shares at the time of redemption.
17.	Section 94 read with Rule 5 (1) – Companies (Management andAdministration) Rules, 2014	To keep and maintain the register of members, debenture holders,copies of annual return filed, etc. at any other place (other than the registered office) in India in which more than one-tenth of the total members entered in the register of members reside.
18.	Section 140	To remove the auditor before the expiry of his term after obtaining the previous approval of the Central Government.
19.	Proviso to Section 149(1)	To approve the appointment of more than fifteen directors.
20.	Section 139(9)(c)	Appointment of an auditor other than a retiring auditor
21.	Section 149(10)	To re-appoint an independent director after expiry of a term of five consecutive years.
22.	Section 165(2)	To specify any lesser number of companies in which director of the company may act as director.
23.	Section 180	To exercise the powers mentioned under Section 180, by the Board of directors with the prior consent of company.
24.	Section 185	To approve a scheme for loan to be given to a managing or whole-time director.
25.	Section 186	To approve giving of loan or guarantee or providing any security or the acquisition of shares exceeding 60% of paid up capital, free reserves and securities premium or 100% of its free reserves and securities premium, whichever is more.
26.	Section 188	To approve entering into related party contract or arrangement in certain specified transactions
27.	Section 196	To appoint a person as managing director, whole-time director or manager who has attained the age of 70 years
28.	Section 197(4)	To approve the remuneration payable to the directors of a company, including any managing or whole-time director or manager
29.	Section 210	To resolve that the affairs of the company should be investigated
30.	Section 212	To resolve that the affairs of the company should be investigated by the Serious Fraud Investigation Office
31.	Sections226 and 304	To resolve the voluntarily winding up of company
32.	Section 248(2)	To approve filing of application before the Registrar to strike off the name of company from the register of companies
33.	Section 262(2)	To approve the Scheme of amalgamation of the sick company with any other Company
34.	Section 271	To resolve the winding up of company by the Tribunal
35.	Section 319(1)	To confer general authority on the liquidator pursuant to Section 319
36.	Section 321	To sanction any arrangement entered into between the creditors and company which is about to be, or is in the course of being wound up
37.	Section 343	To approve that certain power shall be exercised by Company Liquidator
38.	Section 347	To direct the manner of disposing of company’s books and papers when the affairs of a company have been completely wound up and it is about to be dissolved.
39.	Section 371	To adopt Table F in Schedule I, if required.
40.	Schedule V	Remuneration payable by companies having no profit or inadequate profit without Central Government approval – To double the limit of prescribed yearly remuneration
41.	Schedule V	Payment of remuneration upto limits specified in Schedule V for a period not exceeding 3 years
Requirement of passing Special Resolution as per Rules made under the Act
S. No.	Rule	Particulars
42.	Rule 7(1) & 7(3) – Companies (Incorporation) Rules, 2014	Conversion of private company into One Person Company
43.	Rule 21(1) –Companies (Incorporation) Rules, 2014	Conversion of a company registered under Section 8 into a company of any other kind
44.	Rule 22(10) – Companies (Incorporation) Rules, 2014	Amendment of MoA & AoA consequent to conversion of a company registered under Section 8 into a company of any other kind
45.	Rule 14(2)(a) – Companies (Prospectus and Allotment of Securities) Rules, 2014	Offer or invitation for subscription of securities or Private PlacementThe proposed offer of securities or invitation to subscribe securities has been previously approved by the shareholders of the company, by a Special Resolution, for each of the Offers or Invitations
46.	Rule 9(1)(a) – Companies (ShareCapital and Debentures) Rules, 2014	Issue and redemption of preference shares
47.	Rule 12(5)(a) – Companies (ShareCapital and Debentures) Rules, 2014	Vary the terms of Employees Stock Option Scheme not yet exercised by the employees provided such variation is not prejudicial to the interests of the option holders
48.	Rule 16(1) – Companies (ShareCapital and Debentures) Rules, 2014	Provision of money by company for purchase of its own shares by employees or by trustees for the benefit ofEmployees
49.	Rule 3 – Companies(Miscellaneous)Rules, 2014	Application for obtaining status of dormant company.
50.	Rule 6 (d) – Nidhi Rules,2014.	General restrictions or prohibitions.No Nidhi shall acquire another company by purchase of securities or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director having jurisdiction over such Nidhi.

 It is also pertinent to note that in terms of Section 117 (3)(g) of the Act, the statutory requirement of filing Form No. MGT.14 will also arise whenever the Board of Directors exercise following powers onbehalf of the company by means of resolution passed at meetings of the Board, pursuant to Section 179(3) of the Act, namely:—

(a) to make calls on shareholders in respect of money unpaid on their shares;

(b) to authorize buy-back of securities under Section 68;

(c) to issue securities, including debentures, whether in or outside India;

(d) to borrow monies;

(e) to invest the funds of the company;

(f) to grant loans or give guarantee or provide security in respect of loans;

(g) to approve financial statement and the Board’s report;

(h) to diversify the business of the company;

(i) to approve amalgamation, merger or reconstruction;

(j) to take over a company or acquire a controlling or substantial stake in another company;

(k) any other matter which may be prescribed,

Apart from the matters mentioned in Clause (a) to (j) of the Section 179(3), the abovementioned Clause (k) of Section 179(3) also specify that the Board of Directors is required to exercise such powers as may be prescribed by the Central Government by way of passing the resolution at its meeting. For the purpose of Section 179(3)(k) of the Act, following matters has been prescribed by Central Government through the Companies (Meetings of Board and its Powers) Rules,2014. Therefore, even for the matters prescribed in the abovementioned Rules, Form MGT-14 shall also be filed with Registrar of Companies:

(1) to make political contributions;

(2) to appoint or remove key managerial personnel;

(3) to take note of appointment(s) or removal(s) of one level below the Key Management Personnel;

(4) to appoint internal auditors and secretarial auditor;

(5) to take note of the disclosure of director’s interest and shareholding;

(6) to buy, sell investments held by the company (other than trade investments), constituting five percent or more of the paid up share capital and free reserves of the investee company;

(7) to invite or accept or renew public deposits and related matters;

(8) to review or change the terms and conditions of public deposit;

(9) to approve quarterly, half yearly and annual financial statements or financial results as the case may be.

Note: In terms of MCA Circular No. 28/2014 dated 9^th July, 2014, Form MGT – 14 shall be processed through STP in all cases except for change of name, change of object, further issue of capital, and conversion of companies.