Resolutions and Agreements to be Filed
Section 117 of the Companies Act, 2013 deals with the requirement for companies to file certain resolutions and agreements with the Registrar of Companies within a specified time frame. Let’s break down the key points in simple language:
1. What needs to be filed: Whenever a company passes certain resolutions or agreements, they must submit a copy of these documents to the Registrar of Companies. This includes any special resolutions or agreements related to important company matters.
2. When to file: Companies must file these documents within 30 days of passing or making them. If they don’t, they face penalties.
3. Penalties for non-compliance: If a company fails to file these documents on time, they may be fined ₹10,000 initially, and if the failure continues, they may face additional penalties of ₹100 per day, up to a maximum of ₹2,00,000. Company officers responsible for this non-compliance could also be fined ₹10,000 initially and ₹100 per day if the failure persists, up to a maximum of ₹50,000.
4. Types of resolutions and agreements: Section 117 applies to various types of resolutions and agreements, including special resolutions, resolutions passed unanimously by all members, board resolutions regarding the appointment or variation of the terms of appointment of a managing director, and resolutions agreed upon by a specific class of members, among others.
5. Exemptions: Some resolutions related to granting loans or providing security for loans do not need to be filed under certain conditions. For example, resolutions passed by banking companies or specific types of non-banking financial companies do not require filing.
6. Public disclosure: Some resolutions and agreements may need to be placed in the public domain.
Examples:
Scenario 1: If a company decides to change its articles of association (the rules governing the company), they must file a copy of this resolution with the Registrar within 30 days.
Scenario 2: A company’s board of directors agrees to renew the appointment of their managing director. They need to file this agreement within 30 days.
Scenario 3: A special resolution is passed by all the members to issue new shares. The company must submit a copy of this resolution to the Registrar within 30 days.
In summary, Section 117 of the Companies Act, 2013 requires companies to file important resolutions and agreements with the Registrar of Companies within 30 days of passing them. Failure to do so can result in penalties. However, there are exceptions and exemptions for certain types of resolutions, particularly those related to loans and banking companies.
Complete Legal Text of Section 117 The Companies Act, 2013
(1) A copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the Registrar within 5&7[thirty days] of the passing or making thereof in such manner and with such fees as may be prescribed 8[Omitted]:
Provided that the copy of every resolution which has the effect of altering the articles and the copy of every agreement referred to in sub-section (3) shall be embodied in or annexed to every copy of the articles issued after passing of the resolution or making of the agreement.
18[(2) If any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.]
(3) The provisions of this section shall apply to—
(a) special resolutions;
(b) 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 resolutions;
(c) 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;
(d) resolutions 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 been passed by a specified majority or 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;
(e)12[Omitted]
(f) resolutions requiring a company to be wound up voluntarily passed in pursuance of 3[“section 59 of the Insolvency and Bankruptcy Code, 2016”]
4&6[(g) resolutions passed in pursuance of sub-section (3) of section 179 10[Omitted];
2[Provided that no person shall be entitled under section 399 to inspect or obtain copies of such resolutions; 13[Omitted]] ]
19[Provided further that nothing contained in this clause shall apply in respect of a resolution passed to grant loans, or give guarantee or provide security in respect of loans under clause (f) of sub-section (3) of section 179 in the ordinary course of its business by,—
(a) a banking company;
(b) any class of non-banking financial company registered under Chapter IIIB of the Reserve Bank of India Act, 1934, as may be prescribed in consultation with the Reserve Bank of India;
(c) any class of housing finance company registered under the National Housing Bank Act, 1987, as may be prescribed in consultation with the National Housing Bank; and]
(h) any other resolution or agreement as may be prescribed and placed in the public domain.
Amendment
1. Omitted by Companies Amendment Act,2015 dated 25th May, 2015.
In sub-section (3), in clause (g),
Original Omitted Content– “and”.
2. Inserted by Companies (Amendment) Act, and is effective from 29th May 2015.
3. (a) Substituted by Insolvency and Bankruptcy Code, 2016, dated 28th May, 2016.
In section 117 in sub-section (3), in clause (f),
for the word and figures,
“section 304”
the words and figures,
“section 59 of the Insolvency and Bankruptcy Code, 2016”
shall be substituted.
(b) The MCA Notification No.F.O. 3453(E) Dated 15th November, 2016 enforcing the related sections of Insolvency and Bankruptcy Code, 2016.
8. Omitted by the Companies (Amendment )Act,2017 – Amendment Effective from 7th May 2018
Original Omitted Content– “within the time specified under section 403”
9. Substituted by the Companies (Amendment) Act,2017 – Amendment Effective from 7th May 2018
In section 117 for sub-section (2),
for the words and figures “under section 403 with additional fees”
the following word shall be substituted, namely :-
“therein”
10. Substituted by the Companies (Amendment) Act,2017 – Amendment Effective from 7th May 2018
In section 117, in sub-section (2),
for the words “not be less than five lakh rupees”
the following words shall be substituted, namely :-
“not be less than one lakh rupees”
11. Substituted by the Companies (Amendment) Act,2017 – Amendment Effective from 7th May 2018
In section 117 for sub-section (2),
for the words “one lakh rupees”
the following words shall be substituted, namely :-
“fifty thousand rupees”
12. Omitted by the Companies (Amendment )Act,2017 – Amendment Effective from 7th May 2018
Original Omitted Content- “(e)resolutions passed by a company according consent to the exercise by its Board of Directors of any of the powers under clause (a) and clause (c) of sub-section (1) of section 180”
13. Omitted by the Companies (Amendment )Act,2017 – Amendment Effective from 7th May 2018
Original Omitted Content-and
14. Inserted by The Companies (Amendment)Act,2017 – Amendment Effective from 7th May 2018
15. Substituted by the Companies (Amendment) Ordinance,2018 dated 02.11.2018
In section 117,for sub-section (2),
If a company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified 9[therein], the company shall be punishable with fine which shall 10[not be less than one lakh rupees] but which may extend to twenty-five lakh rupees 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 11[fifty thousand rupees] but which may extend to five lakh rupees
the following sub-section shall be substituted, namely:-
(2) If any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of twenty-five lakh rupees and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.
16. Substituted by the Companies (Amendment) Ordinance,2019 dated 12.01.2019 [Companies (Amendment) Ordinance 2018 is repealed on 12th January 2019]
17. Substituted by the Companies (Amendment) Act,2019 -: Effective From 02nd November 2018 [Companies (Amendment) Second Ordinance 2019 is repealed on 31st July 2019]
18. Substituted by the Companies (Amendment) Act, 2020. Notification dated 28th September, 2020 Amendment Effective from 21st December 2020
for sub-section (2),
(2) 17,[16[15[If any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of twenty-five lakh rupees and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.]]]
the following sub-section shall be substituted, namely
(2) If any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.
19. Substituted by the Companies (Amendment) Act, 2020. Notification dated 28th September, 2020 Amendment Effective from 22nd January 2021
in sub-section (3),in clause (g), for the second proviso
14 [Provided further that nothing contained in this clause shall apply to a banking company in respect of a resolution passed to grant loans, or give guarantee or provide security in respect of loans under clause (f) of sub-section (3) of section 179 in the ordinary course of its business; and.]
the following proviso shall be substituted, namely:
Provided further that nothing contained in this clause shall apply in respect of a resolution passed to grant loans, or give guarantee or provide security in respect of loans under clause (f) of sub-section (3) of section 179 in the ordinary course of its business by,—
(a) a banking company;
(b) any class of non-banking financial company registered under Chapter IIIB of the Reserve Bank of India Act, 1934, as may be prescribed in consultation with the Reserve Bank of India;
(c) any class of housing finance company registered under the National Housing Bank Act, 1987, as may be prescribed in consultation with the National Housing Bank; and
Exceptions/ Modification/ Adaptation
4. In case of private company – clause (g) of Sub-section 3 of section 117 shall not apply . – Notification dated 5th june, 2015.
5. In case of Specified IFSC Public Company – Sub-section (1) of section 117, for the words “thirty days” read as “sixty days”. – Notification Dated 4th January, 2017.
6. In case of Specified IFSC Public Company – Clause (g) of sub-section (3) of section 117 shall not apply. – Notification Dated 4th January, 2017.
7. In case of Specified IFSC Private Company – Sub-section (1) of section 117, for the words “thirty days” read as “sixty days”. – Notification Dated 4th January, 2017.
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