Form MGT-8 is a certification given on a company’s annual return by a practising company secretary, as per the Companies Act 2013, under Section 92(2).
According to Section 92(2) of the Companies Act, 2013 read with rule 11(2) of Companies ( Management and Administration) Rules 2014, the annual return of a listed company or a company having paid-up share capital of Rs 10 crore or more and a turnover of Rs 50 crore or above will be certified by the company secretary in practice, and the certificate shall be in Form No MGT 8. The Company Secretary shall certify that the annual return discloses the facts correctly and adequately and the firm has complied with all the provisions of the Act.
2. Contents of the Report
The company secretary shall certify that:
- The annual return states the facts adequately and correctly as at the end of the financial year.
- The firm has complied with the provisions of the Act and the rules in respect of:
– The status of the company under the Act.
– Maintenance of registers, records, and making entries within the prescribed period.
– Filing of forms and returns with the appropriate authority.
– Calling/convening/holding meetings of the board of directors or the committees.
– Closure of register of the members or security holders.
– Advances to directors or persons mentioned in section 185 of the Companies Act, 2013.
– Contracts or arrangements with persons specified in Section 188 of the Companies Act, 2013 as related parties.
– Details of changes in share capital by way of issue, transfer, transmission, redemption, buyback or conversion of securities.
– Right of dividend/bonus shares/right shares being kept in abeyance till the registration of transfer is completed.
– Amount to be moved to the Investor Education and Protection Fund as per Section 125 of the Companies Act, 2013.
– Audited financial statements signed as per Section 134 of the Companies Act, 2013.
– Appointment/reappointment/remuneration pertaining to directors and key managerial personnel.
– Appointment of auditors as per Section 139 of the Companies Act, 2013.
– Approval required to be taken from the appropriate authorities.
– Acceptance, renewal, and repayment of deposits.
– Borrowings from director/members/other institutions and matters pertaining to charge.
– Provision of loans/investment/guarantee to bodies corporate or persons provided in Section 186 of the Companies Act, 2013.
– Alteration of the articles of association/memorandum of association.
3. Penalty for Non-Compliance
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.
A practising company secretary will be liable for disciplinary actions by the Disciplinary Committee of the ICSI under the provisions of Company Secretaries Act, 1980. Further, Section 448 of Companies Act, 2013 also imposes a penalty if any return, report, certificate, financial statement, prospectus, statement or any other document makes a false statement or omits any material fact.
Finally, section 447 of Companies Act 2013 imposes a severe punishment of imprisonment if any person is found to be guilty of fraud. It shall be for a minimum of six months and can extend to ten years. In addition, a fine will be imposed, which shall not be less than the amount involved in the fraud and may extend to three times the amount involved in the fraud. If the case is more serious, involving public interest, the imprisonment would be for a minimum of three years.
4. Form MGT-8
Form MGT-8 word format
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