The management of the Company is run by the Board of Directors.   Some powers are given only to the shareholders that can be exercised in general meeting.   Resolution is passed in such meetings for the implementation of the same by the company.   Resolution may be ordinary resolution and special resolution.

Ordinary resolution

Section 114(1) provides that a resolution shall be an ordinary resolution if the notice required under the Companies Act has been duly given and it is required to be passed by the votes cast in favor of the resolution, including the casting vote, if any, of the Chairman, by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy or by postal ballot, exceed the votes, if any, cast against the resolution by members, so entitled and voting.

Special resolution

Section 114(2) provides that a resolution shall be a special resolution when-

• The intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other information given to the members of the resolution;
• The notice required under the Act has been duly given; and
• The votes cast in favor of the resolution, whether on a show of hands or electronically or on a poll, as the case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any cast against the resolution by members so entitled and voting.

Resolutions requiring special notice

Section 115 provides that where,  by any provision contained in the Companies Act, 2013 or in the articles of a company, special notice is required of any resolution, notice of the intention to move such resolution shall be given to the company by such number of members holding not less than 1% of the total voting power or holding shares on which such aggregate sum not exceeding Rs.5 lakh, as may be prescribed, has been paid up and the company shall give its members notice of the resolution in such manner as may be prescribed.

Resolutions passed at adjourned meeting

Section 116 provides that where a resolution is passed at an adjourned meeting of a company or the holders of any class of shares in a company or the Board of Directors of a company the resolution shall, for all purposes, be treated as having been passed on the date on which it was in fact passed, and shall not be deemed to have been passed in any earlier date.

Resolution to be filed with Registrar

• Special resolutions;
• Resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolution;
• Any resolution of the Board of Directors of a company or agreement executed by a company, relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director;
• Resolution or agreements which have been agreed to by any class of members but which, if not so agreed to, would not have been effective  for their purpose unless they had bene passed by a specified majority or other otherwise in some particular manner and all resolutions or agreements which effectively bind such class of members though not agreed to by all those members;
• Resolution requiring a company to be wound up voluntarily passed in pursuance of Section 304;
• Resolutions passed in pursuance of Section 179 (3); and
• Any other resolution or agreements as may be prescribed and placed in the public domain.

Section 179 (3) provides that the Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:-

• to make  calls on shareholders in respect of money unpaid on their shares;
• to authorize buy-back of securities under Section 98;
• to issue securities including debentures, whether in or outside India;
• to  borrow monies;
• to invest the funds of the company;
• to grant loans or give guarantee or provide security in respect of loans;
• to approve financial statement and the Board’s report;
• to diversify the business of the company;
• to approve amalgamation, merger or reconstruction;
• to take over a company or acquire a controlling or substantial stake in another company;
• any other matter which may be prescribed.

The resolution shall be filed within thirty days of the passing of resolution.  The resolution shall be accompanied with the explanatory statement under Section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed. 

Section 304 provides that a company may be wound up voluntarily-

• If the company in general meeting passes a resolution requiring the company to be wound up voluntarily as a result of the expiry of the period for its duration, if any, fixed by its articles or on the occurrence of any event in respect of which the articles provide that the company should be dissolved; or
• If the company passes a special resolution that the company be would up voluntarily.
  

  The copy of every resolution which has the effect of altering the articles shall be embodied in or annexed to every copy of the articles issued after passing of the resolution.

Form MGT-14

Rule 24 of the Companies (Management and Administration) Rules, 2014 provides that a copy of every resolution required to be filed, along with the explanatory statement under Section 102, if any, shall be filed with the Registrar in Form No. MGT-14 along with the fee.   Section 102 (1) provides that a statement setting out the following material facts concerning each item of special business to be transacted at a general meeting, shall be annexed to the notice calling such meeting, namely:—

• The nature of concern or interest, financial or otherwise, if any, in respect of each item of-
  • Every director and the manager, if any;
  • Every other key managerial personnel, if any;
  • Relatives of the persons mentioned above
• Any other information and facts that may enable members to understand the meaning, scope and implications of the items of the business and to take decision thereon.

Section 102(2) provides that for purposes of sub-section (1), all businesses transacted  thereat shall be deemed special, other than-

• The consideration of financial statements and the reports of the Board  of Directors and Auditors;
• The declaration of any dividend;
• The appointment of directors  in place of those retiring;
• The appointment and the fixing of the remuneration of the auditors  and

in the case of other meetings, all business shall be deemed to be special.

The proviso to Section 102(2) provides that where any item of special business to be transacted at a meeting of the company relates to or affects any other company, the extent of shareholding interest in that other company of every promoter, director, manager, if any, and of every other key managerial personnel of the first mentioned company shall, if the extent of such shareholding is not less than two per cent. of the paid-up share capital of that company, also be set out in the statement.

Section 102 (3) provides that where any item of business refers to any document, which is to be considered at the meeting, the time and place where such document can be inspected shall be specified in the statement under sub-section (1).

Section 102 (4) provides that Where as a result of the non-disclosure or insufficient disclosure in any statement referred to in sub-section (1), being made by a promoter, director, manager, if any, or other key  managerial personnel, any benefit which accrues to such promoter, director, manager or other key managerial personnel or their relatives, either directly or indirectly, the promoter, director, manager or other key managerial personnel, as the case may be, shall hold such benefit in trust for the company, and shall, without prejudice to any other action being taken against him under this Act or under any other law for the time being in force, be liable to compensate the company to the extent of the benefit received by him.

Rule 15 (6) provides that a copy of the proposed resolution in advance to be filed  with the Registrar as required with first proviso to Section 94(1) shall be filed with Registrar at least one day before the date of general meeting of the company in Form – MGT 14.  Section 94(1) provides that the registers required to be kept and maintained by a company under section

88 and copies of the annual return filed under section 92 shall be kept at the registered office of the company.  The proviso to this section provides that such registers or copies of return may also be kept at any other place in India in which more than one-tenth of the total number of members entered in the register of members reside, if approved by a special resolution passed at a general meeting of the company and the Registrar has been given a copy of the proposed special resolution in advance. The second proviso to this section provides that the period for which the registers, returns and records  required to be kept shall be such as may be prescribed.

Thus Form MGT – 14 is to be filed for the following:

• Registration of resolutions;
• Postal ballot resolutions under Section 110;
• Proposed resolution under Section 94 (1).
• Certain resolutions under Section 192 of the Companies Act, 1956.

The following particulars are to be furnished in the MGT 14 form:

• Date of dispatch of notice of resolution, postal ballot resolution;
• Date of passing of resolution, postal ballot resolution;
• Details of resolution under which section of Companies Act, 2013/Companies Act, 1956;
• Purposes of passing resolution;
• Subject matter of resolution;
• The Authority of passing or agreeing to the resolution-
  • Board of Directors;
  • Shareholders;
  • Class of shareholders;
  • Creditors.
• Type of resolution – Special/Ordinary;
• In case of alteration in object class – whether there is any change in the industrial activity of the company?  If so the details shall be furnished;
• In case of voluntary winding up-
  • Mode of winding up – by members or creditors;
  • Date of commencement of winding up;
  • Number of liquidators;
  • Details of liquidators.

The following files shall be attached with MGT – 14:

• Copy (s) of resolution along with copy of explanatory statement under Section 102;
• Altered Memorandum of Association;
• Altered Articles of Association;
• Optional attachment, if any.

The MGT – 14 for indicates that the provisions of Section 448 and 449 of the Act would attract  punishment for false statement and false evidence respectively.

Punishment

Section 102 (5) provides that if any default is made in complying with the provisions of this section, every promoter, director, manager or other key managerial personnel who is in default shall be punishable with fine which may extend to fifty thousand rupees or five times the amount of benefit accruing to the promoter, director, manager or other key managerial personnel or any of his relatives, whichever is more.

Section 117(2) provides that if a company fails to file the resolution before the expiry of the period specified under Section 403 with additional fee, the company shall be punishable with fine which shall not be less than Rs.5 lakhs but which may extend to Rs.25 lakhs and every officer of the company who is in default, including liquidator of the company, if any, shall be punishable with fine which shall not be less than Rs.1 lakh but which may extend to Rs. 5 lakhs.

Section 448 provides that save as otherwise provided in this Act, if in any return, report, certificate, financial statement, prospectus, statement or other document required by, or for, the purposes of any of the provisions of this Act or the rules made there under, any person makes a statement,—

• which is false in any material particulars, knowing it to be false; or
• which omits any material fact, knowing it to be material,

he  shall be punishable under Section 447.

Section 449 provides that save as otherwise provided in this Act, if any person intentionally gives false evidence—

• upon any examination on oath or solemn affirmation authorized under this Act; or
• in any affidavit, deposition or solemn affirmation, in or about the winding up of any company under this Act, or otherwise in or about any matter arising under this Act, he shall be punishable with imprisonment for a term which shall not be less than 3 years but which may extend to 7 years with fine which may extend to Rs.10 lakhs

Rule 30 provides that if any default is made in compliance with any of the provisions of this rule, the company and every officers or such other person who is in default shall be punishable with fine which may extend to five thousand rupees and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first during which such contravention continues.