Introduction to Form MGT-8
Form MGT-8 is the certificate of performance of the annual return certified by the Secretary of the Company as follows:
- Having paid-up a share capital of 10 Crore Rupees
- Or more or a turnover of fifty crore ropes
- Or more by the listed company, by the secretary of the practicing company.
Pursuant to Rule 11(2) of the Companies Act 2013, pursuant to Section 92(2), the Secretary of the Company shall carefully examine the documents of the company, the registers, the registers, the books, in order to provide the company with assurance that there is no risk of fraudulent activity and any misappropriation.
The annual income tax return of the company secretary, filed by the company having prescribed turnover and paid-up capital, should be certified in the prescribed form in accordance with Section 92(2). The annual return which discloses the facts must be correct while complying with all the provisions of the Act.
Compliance Aspects For Form MGT-8
Form MGT-8 requires a certificate of assurance that this aspect of the company has complied with the provisions of the Act & Rules of Procedure. The responsibility of the company’s secretary is limited only to the regulation in question. Some of the following aspects of compliance dealt with in Form MGT-8 are:
- The status of a company under the Act;
- Maintaining records, books, and making entries within a given time period,
- Recording and filing of forms on an annual basis with the Central Government, the Tribunal, the Court of Justice, the Registrar of Companies, the Regional Director and other authorities within / beyond the prescribed time limit.
- Calling / convening / holding meetings of the Board of Directors with the Board of Directors or its committees, if any. The meetings of the members of the company shall take place within the prescribed time. According to the annual return for which the meetings were held, the proper notices were given and the proceedings, including the circular resolutions and the resolutions adopted by postal ballot.
- Closure of Security Holders / Registry of Members,
- Advances / loans to directors and/or firms or companies or persons referred to in section 185 of the Act;
- Arrangements / Contracts with related parties as referred to in section 188 of the Act;
- The purchase of securities or shares / the redemption of preference shares or bonds / the alteration of share capital / or the reduction of share capital / the conversion of shares / securities and the issuance of share certificates in all instances;/the issuance, assignment, transfer, transfer of shares.
- Maintaining the right to share rights, dividends and bonus shares in the state of dormancy until the transfer of shares is registered in accordance with the provisions of the Act.
- The signing of an audited financial statement pursuant to the provisions of section 134 of the Act. The report of the directors shall be as set out in subsections (3), (4) and (5).
- Declaration / payment of dividends, transfer of unpaid / unclaimed dividends / other amounts as applicable to the Investor Education and Protection Fund pursuant to section 125 of the Act;
- Constitution / re-appointment / nomination of director / retirement / filling of casual vacancies / retirement / disclosure of directors, key management personnel and remuneration paid to them.
- Appointment / reappointment / filling of casual vacant auditors pursuant to the provisions of section 139 of the Act;
- Consideration must be given to the Central Government, the Tribunal, the Regional Director, the Registrar, the Court or the other authorities as provided for in the various provisions of the Act.
- Acceptance / renewal / refund of deposits.
- Borrowings by its directors, members, public financial institutions , banks and others, and the creation of charges / modifications / satisfying fees, where applicable.
- Adaptation of the provisions of the Memorandum and of the Articles of Association of the Company.
Form MGT-8: Penalties for Non-Compliance
If the Secretary of the Company provides a false certificate in Form MGT-8 which does not comply with all the provisions of Section 92, the penalty shall be borne by the Secretary of the Company. The fine that the Secretary of the Company shall bear shall not be less than Rs 50,000 and may be extended to Rs . 5 Lakh.
The Secretary of the Company shall also be liable for disciplinary action by the Disciplinary Committee of the ICSI in accordance with the provisions of the Company Secretaries Act, 1980.
If any return, report, certificate, financial statement or other document makes a false statement or omits any material or incorrect information, Section 448 of the Company Act, 2013 also imposes a penalty on the Secretary of the Company. Serious penalties for imprisonment shall be imposed if someone is found guilty or for fraud.
The period of imprisonment shall be at least 6 months and may be extended to 10 years. In addition, a fine equal to the amount involved in the fraud will be imposed or may be extended to three times the amount of fraud involved in the fraud. If the case becomes more serious and the general public is affected by this, a minimum period of imprisonment of 3 years will be granted.