Information

What is MGT-8?

Form MGT-8 is a certification provided by a practicing company secretary on a company’s annual return, according to the Companies Act 2013, under Section 92(2). In Form MGT-8, the CS certifies that the annual return discloses the facts correctly and adequately and that it complies with the relevant provisions of the Company’s Act 2013. In order to provide such an assurance, the company secretary needs to carefully examine the registers, records, books and papers of a company to ensure they are free from any misrepresentations and fraudulent activities.

Applicability of Form MGT-8

According to the rules under Section 92(2) of the Companies (Management and Administration) Rules, 2014, the following types of companies should get their annual returns certified by a practicing Company Secretary in the Form MGT-8:

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

Compliance Aspects

The certificate assures that a company has complied with provisions of the Act & Rules under some aspects of compliance. The following are the some of the aspects of compliance that the MGT-8 deals with:

  • Status of the company under the Act
  • Maintenance of registers / records, filing of forms and returns
  • Calling / convening / holding meetings of Board of Directors or its committees
  • Closure of Register
  • Advances / loans to its directors
  • Contracts / arrangements with related parties
  • Issue, allotment, transfer, transmission, or buyback of securities or shares
  • Signing of audited financial statement
  • Approvals required to be taken from the Central Government and other local authorities

A penalty for Non-Compliance

There is a penalty for a company secretary who provides a false certificate in form MGT-8 which does not comply with the requirements mentioned in the laws of Section 92. The company secretary has to bear the fine which shall not be less than Rs. 50,000 and might extend to Rs. 5 Lakh.

A company secretary will be accountable for disciplinary actions by the Disciplinary Committee of the ICSI under the provisions of the Company Secretaries Act, 1980. The Section 448 of Companies Act, 2013 also imposes a penalty if any return, report, certificate, financial statement, or any other document makes a false statement or omits any material or incorrect facts.

The Section 447 of Companies Act 2013 imposes a serious 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.

Information
What is MGT-8?

Form MGT-8 is a certification provided by a practicing company secretary on a company’s annual return, according to the Companies Act 2013, under Section 92(2). In Form MGT-8, the CS certifies that the annual return discloses the facts correctly and adequately and that it complies with the relevant provisions of the Company’s Act 2013. In order to provide such an assurance, the company secretary needs to carefully examine the registers, records, books and papers of a company to ensure they are free from any misrepresentations and fraudulent activities.

Applicability of Form MGT-8

According to the rules under Section 92(2) of the Companies (Management and Administration) Rules, 2014, the following types of companies should get their annual returns certified by a practicing Company Secretary in the Form MGT-8:

  • Listed Company, or
  • A company having a paid-up share capital of Rs. 10 Crores or more, or
  • A company with a turnover of Rs. 50 Crores or more
Compliance Aspects

The certificate assures that a company has complied with provisions of the Act & Rules under some aspects of compliance. The following are the some of the aspects of compliance that the MGT-8 deals with:

  • Status of the company under the Act
  • Maintenance of registers / records, filing of forms and returns
  • Calling / convening / holding meetings of Board of Directors or its committees
  • Closure of Register
  • Advances / loans to its directors
  • Contracts / arrangements with related parties
  • Issue, allotment, transfer, transmission, or buyback of securities or shares
  • Signing of audited financial statement
  • Approvals required to be taken from the Central Government and other local authorities
A penalty for Non-Compliance

There is a penalty for a company secretary who provides a false certificate in form MGT-8 which does not comply with the requirements mentioned in the laws of Section 92. The company secretary has to bear the fine which shall not be less than Rs. 50,000 and might extend to Rs. 5 Lakh.

A company secretary will be accountable for disciplinary actions by the Disciplinary Committee of the ICSI under the provisions of the Company Secretaries Act, 1980. The Section 448 of Companies Act, 2013 also imposes a penalty if any return, report, certificate, financial statement, or any other document makes a false statement or omits any material or incorrect facts.

The Section 447 of Companies Act 2013 imposes a serious 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.