What are the consequences of late filing of MGT 14?

What are the consequences of late filing of MGT 14?. Section 117 of the Companies Act, 2013 requires companies to file copies of resolutions and agreements, specified in subsection (3), with the Registrar within 30 days of their passing or making. The resolutions must be accompanied by an explanatory statement as per Section 102, if applicable. This section applies to special resolutions, resolutions agreed to by all members, and specific Board resolutions, such as those concerning the appointment or reappointment of managing directors. Penalties are enforced to ensure timely compliance and transparency in corporate decision-making.
Failure to comply results in a penalty of ?10,000 for the company, with a daily penalty of ?100 for continued non-compliance, subject to a maximum of ?2 lakh. Officers in default face a penalty of ?10,000, with a daily penalty of ?100, subject to a maximum of ?50,000.
Applicable Provisions
The MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (ER), Hyderabad, for consideration.
Facts of the Case with ROC and RD 
In Stanley Lifestyle Limited, Registrar of Companies in his order of adjudication has stated that the Company has filed three Suo-moto adjudications on 07.09.2023 wherein it was submitted by the company that three resolutions were passed by the company which ought to have been filed in e-form MGT-14 as per the provisions of Section 1 1 7 ( l ) of the Act which have been missed out inadvertently
Considering the fact and circumstances of the case, Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants on 01.02.2024. The authorised representative stated that

The company has failed to file the aforementioned form MGT-14 s within due date for the above-mentioned resolutions. However, the company had filed resolution on 13/10/2023 with the additional fee as per the Companies (The Registration Offices and Fees) Rules, 2014.

Due to over sightedness and the disruptions caused by covid-19 pandemic, the Company's business was affected, and the main focus of the Company was to maintain its existing turnover and profits of the Company. Further the staff of the Company were working from home, which had its limitations.

Imposing maximum penalty by the Registrar of Companies, on the Company, its Managing Director, Whole-Time Director, CFO, CSs (including Ex-CS), is harsh, burdensome on the Company.

Imposed Penalty
Hearing was held before Registrar of Companies on 05.12.2023 and after hearing the authorized representative had levied a penalty of Rs.  on the Company and Rs.1850000/- each for 3 officers i.e., Shubha Sunil, Sunil Suresh and Akash Shetfy and Rs.   for Pradeep Kumar and Rs. for Jitesh Bansal (total aggregating to 1074,700/-).
Reduction in Penalties, If any
Taking into consideration the Adjudication Order of the Registrar of Companies, Mumbai, submissions made by the Appellants in their application and, oral submissions of the authorized representative of the company and RoC during the hearing, concerned RD reduce the penalty amount to 20% i.e  for the company amounting to Rs. 79,140 and for 3 officers Rs. 30,000 each and for Pradeep Kumar amounting to Rs.25,800/- and for Jitesh Bansal amounting to Rs.20t000/- (total aggregating to Rs.2, 14,940/-).
Any Benefit of Section 446B of Companies Act
Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. In adjudication matter of Stanley Lifestyle Limited, does not qualify to claim the benefit under section 446B of the companies Act 2013.
To conclude:
In the adjudication matter concerning Stanley Lifestyle Limited, it is evident that the company, along with its officers, was found in default for failing to comply with the provisions of Section 117 of the Companies Act, 2013, while filling MGT-14 for the action taken by the Board of directors. While making appeal company has made the default good with an additional fee considering this RD had reduce the penalty amount by 20% for both company and officers in default.
Download MCA Adjudication Order

Section 117 of the Companies Act, 2013 requires companies to file copies of resolutions and agreements, specified in subsection (3), with the Registrar within 30 days of their passing or making. The resolutions must be accompanied by an explanatory statement as per Section 102, if applicable. This section applies to special resolutions, resolutions agreed to by all members, and specific Board resolutions, such as those concerning the appointment or reappointment of managing directors. Penalties are enforced to ensure timely compliance and transparency in corporate decision-making.

Failure to comply results in a penalty of ?10,000 for the company, with a daily penalty of ?100 for continued non-compliance, subject to a maximum of ?2 lakh. Officers in default face a penalty of ?10,000, with a daily penalty of ?100, subject to a maximum of ?50,000.

Applicable Provisions

The MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (ER), Hyderabad, for consideration.

Facts of the Case with ROC and RD

In Stanley Lifestyle Limited, Registrar of Companies in his order of adjudication has stated that the Company has filed three Suo-moto adjudications on 07.09.2023 wherein it was submitted by the company that three resolutions were passed by the company which ought to have been filed in e-form MGT-14 as per the provisions of Section 1 1 7 ( l ) of the Act which have been missed out inadvertently

Considering the fact and circumstances of the case, Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants on 01.02.2024. The authorised representative stated that

The company has failed to file the aforementioned form MGT-14 s within due date for the above-mentioned resolutions. However, the company had filed resolution on 13/10/2023 with the additional fee as per the Companies (The Registration Offices and Fees) Rules, 2014.
Due to over sightedness and the disruptions caused by covid-19 pandemic, the Company's business was affected, and the main focus of the Company was to maintain its existing turnover and profits of the Company. Further the staff of the Company were working from home, which had its limitations.
Imposing maximum penalty by the Registrar of Companies, on the Company, its Managing Director, Whole-Time Director, CFO, CSs (including Ex-CS), is harsh, burdensome on the Company.

Imposed Penalty

Hearing was held before Registrar of Companies on 05.12.2023 and after hearing the authorized representative had levied a penalty of Rs. on the Company and Rs.1850000/- each for 3 officers i.e., Shubha Sunil, Sunil Suresh and Akash Shetfy and Rs. for Pradeep Kumar and Rs. for Jitesh Bansal (total aggregating to 1074,700/-).

Reduction in Penalties, If any

Taking into consideration the Adjudication Order of the Registrar of Companies, Mumbai, submissions made by the Appellants in their application and, oral submissions of the authorized representative of the company and RoC during the hearing, concerned RD reduce the penalty amount to 20% i.e for the company amounting to Rs. 79,140 and for 3 officers Rs. 30,000 each and for Pradeep Kumar amounting to Rs.25,800/- and for Jitesh Bansal amounting to Rs.20t000/- (total aggregating to Rs.2, 14,940/-).

Any Benefit of Section 446B of Companies Act

Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. In adjudication matter of Stanley Lifestyle Limited, does not qualify to claim the benefit under section 446B of the companies Act 2013.

To conclude:

In the adjudication matter concerning Stanley Lifestyle Limited, it is evident that the company, along with its officers, was found in default for failing to comply with the provisions of Section 117 of the Companies Act, 2013, while filling MGT-14 for the action taken by the Board of directors. While making appeal company has made the default good with an additional fee considering this RD had reduce the penalty amount by 20% for both company and officers in default.