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No MGT-14 is required to the private company for right issue of shares
No MGT-14 is required to the private company for right issue of shares
Every decision of the company has to be in the form of board resolution or member resolution. And it needs to be reported with ROC within 30 days in a specified form. 'Form MGT-14 is the specified form used to report the resolutions of the company.
Why MGT-14 is filed?
The companies act, 2013 introduced "Form MGT-14" to submit the resolutions passed by the company.
The purpose of filing MGT-14 is to register decisions of the company with the ROC. And the penalty shall be imposed for late filing/non-filing of resolutions.
Right Issue of shares
Right issue is the way to raise funds from existing shareholders.Board of directors allot the right shares under section 62(1)(a).
MGT-14 for right issue of shares
Section 117(3)(g) states that every company should file MGT-14 for resolutions passed by the board of directors to issue securities.
Thus every company irerspective of its type should file MGT-14 within 30 days of resolution.
However, MCA had issued a circular dated 5 June 2015 which has given a exemption to the private company from filing of board resolution for the exercise of power given under section 179(3).
Thus the private companies are exempted from filing of MGT-14 for right issue of shares.
Hope it clarifies you
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