For every step taken in a company, you need to file a form for that. Among the heap of forms, the government has provided some relaxation, through the amendment, to the companies. It seems the government has realized that a major time is lost in duly complying the compliance. Through this amendment, start-ups will be relieved from some compliance and will be able to concentrate on their survival. If compliance get lessen then many more can think of incorporation.
MCA, through a notification dated 18th March, 2015 has made the following amendment regarding filing of Form MGT14:
Amendment to the Companies (Meeting of Board & its Powers) Rules, 2014 by relaxing requirement of discussion of few items only by way of Resolution at the Board Meeting such as-
- taking note of appointment(s) or removal(s) of one level below the Key Management Personnel,
- taking note of the disclosure of director’s interest and shareholding,
- buying, selling 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,
- inviting or accepting or renewing public deposits and related matters,
- reviewing or change the terms and conditions of public deposit,
- approving quarterly, half yearly and annual financial statements or financial results as the case may be.
Board meeting filing relaxed, good news for businesses.
As per Section 117 of the Companies act, 2013, a copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement if any, annexed to the notice, shall be filed with the Registrar. Such filing shall be done within 30 days of the passing or making thereof through filing of form MGT 14.
Now, let us look at the provisions of Section 179(3):
The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board. Hence, whenever company passed any resolution to exercise the powers mentioned below as prescribed through rule 8(5) read with section 179(3)(k), said resolution would required to be filed with ROC within 30 days through form MGT 14. Please find below the list of items given in rule 8(5):
- to make political contributions;
- to appoint or remove key managerial personnel (KMP);
- to take note of appointment(s) or removal(s) of one level below the Key Management Personnel;
- to appoint internal auditors and secretarial auditor;
- to take note of the disclosure of director’s interest and shareholding;
- 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;
- to invite or accept or renew public deposits and related matters;
- to review or change the terms and conditions of public deposit;
- to approve quarterly, half yearly and annual financial statements or financial results as the case may be.
Thus, in the Companies (Meetings of Board and its Powers) Rules, 2014,
- In Rule 8, item numbers (3), (5), (6), (7), (8) and (9) and the entries relating thereto shall be omitted.
- In Rule 10, in the proviso, for the word ‘principle” the word ‘principal’ shall be substituted.