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Introduction

As per section 92 of the Companies Act, 2013, MGT-8 is a mini secretarial audit which is submitted as an attachment to the annual return of the companies in form MGT-7. It is mandatory to get this form certified by a company secretary in practice.

MGT-8 form is required to certify the annual returns filed by a company. In this form, a company secretary in practice confirms that the fact provided by the annual returns discloses correct and adequate information and complying with all the provisions of the Companies Act, 2014.

Form MGT-8 is one of the attachments of the form MGT-7 (Annual Return).

Not all companies are required to obtain and furnish this form with the annual return. Following categories of the companies are required to file this form:

Applicability for filling MGT-8

As per section 92 of the Companies Act, 2013 and the Companies (Management and Administration) Rules, 2014, the following types of companies are required to file form MGT-8:

• Listed company, or
• A company having paid-up share capital of Rs 10 crores or more, or
• A company with a turnover of Rs 50 crores or more

Consequences for not filling MGT-8

1. Disqualifications of director u/s 164(2) and vacation of directors’ u/s 167.
2. Ground to wind up by tribunal except private companies, government companies, section 8 companies.

Compliance aspects for filling MGT-8

Following compliance are covered under the form MGT – 8:

1. The annual return shall state the fact correctly and adequately.
2. During financial year company has to comply with provisions of the act & rules made thereunder:
3. Status of the company under the act.
4. Maintenance of registers/ records, filing of forms and returns as stated in the annual return within prescribed time.
5. Holding Board meeting, committee meeting or class meeting on due dates as stated in the annual return.
6. Closure of registers of members/security holders.
7. Advance loans to its directors/firm or any person or companies referred in section 185.
8. Contract or agreements with related party u/s 188.
9. Issue/allotment/transfer/transmission / buy back of securities/ redemption of preference shares or debentures/ alteration or reduction of share capital/conversion of shares/securities and issue of security certificates.
10. Keeping in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares.
11. Declaration/ payment of dividend; transfer of unpaid/ unclaimed dividend/other amounts to the IEPF as per section 125.
12. Signing of audited financial statement as per section 134 and Boards report is as per sub-section (3), (4) and (5) of section 134.
13. Constitution/appointment/re-appointments/retirement/filling up  casual vacancies/Disclosures of the Directors, Key Managerial Personnel and the remuneration paid to them;
14. Appointment/ reappointment/ filling up casual vacancies of auditors as per section139.
15. Approvals required to be taken from the CG, NCLT, RD, and ROC, Court or such other authorities under the provisions of the Act.
16. Acceptance/ renewal/ repayment of deposits.
17. Borrowings from its directors, members, public financial institutions, banks and others and   creation modification/ satisfaction of charges.
18. Loans and investments or guarantees given or providing of securities to other bodies corporate or persons falling under the provisions of section 186 of the Act.
19. Alteration of MOA and/ or AOA of the Company.

Time limit for filing of MGT-8

The form must be filed within 60 days from the date on which general meeting held or if the general meeting is not held than 60 days from the last date on which general meeting must be held. It is filed along with the annual return form MGT – 7. Annual Return of a company cannot be filed without attaching form MGT – 8.

Duties of company secretary in practice

Following are the duties of practicing company secretary regarding MGT-8

1. Due consideration of the provisions of the Act
2. Check thoroughly the correctness of the compliances done by the company.
3. Exercise due care, diligence and skill
4. Obtain Letter of engagement/ BR – authorization
5. Maintain copy of documents and information verified
6. Witness the authorised signatory of form signing it
7. Ensure all attachments are duly attached and are legible

Penalty for non-compliance of MGT-8

For companies:

 If the form MGT-8 is not filed within the specified time limit than the company shall be punishable with a minimum fine of Rs. 50,000 (Rupees fifty thousand) which may extend to Rs. 5,00,000 (Rupees Five lakhs) .

Officer in default:

Imprisonment up to 6 months or with a minimum fine of Rs. 50,000 (Rupees fifty thousand) which may extend to Rs. 5,00,000 (Rupees Five lakhs), or both.

For Company Secretary:

If the Company Secretary certifies the annual return which is not in conformity with the section/rules, then he/she shall be punishable with fine which shall be a minimum of Rs 50,000 and a maximum of Rs 5 lakh.

Format of the Form MGT – 8

Click here to download the format of MGT – 8.

This article is written as per the applicable provisions of the Companies Act, 2013 and rules made thereunder on the current date. The same is subject to change. Kindly check the provisions before using the content of this article.