Rules 12 and 14 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 12 requires a company that gives loans or guarantees, provides security or acquires securities to keep a register in Form MBP 2. Rule 14, which supports section 187, requires a register in Form MBP 3 of investments that the company holds beneficially but not in its own name. This article reflects the rules as amended up to G.S.R. 811(E) dated 3 November 2025 per the MCA e-book. Later amendments should be checked.
Every company giving a loan or guarantee, providing security or making an acquisition of securities must, from the date of its incorporation, keep a register in Form MBP 2 and make each entry chronologically within seven days (rule 12(1) and (2)). The register is kept at the registered office, preserved permanently and authenticated by the company secretary or a person the Board authorises. Every company must also keep a register in Form MBP 3 of investments beneficially held but not in its own name, with the reasons and the relationship or contract under which they are held (rule 14).
Rule 12: the MBP-2 register
| Sub-rule | Requirement |
|---|---|
| 12(1) | Every company giving loan, giving guarantee, providing security or making an acquisition of securities must, from the date of its incorporation, maintain a register in Form MBP 2 and enter separately the particulars of loans and guarantees given, securities provided and acquisitions made |
| 12(2) | Entries are made chronologically for each transaction within seven days of making the loan, giving the guarantee, providing the security or making the acquisition |
| 12(3) | The register is kept at the registered office, preserved permanently, and held in the custody of the company secretary or any other person authorised by the Board |
| 12(4) | Entries (manual or electronic) are authenticated by the company secretary or any other person authorised by the Board |
| 12(5) | For sub-rule (4), the register may be kept manually or in electronic mode |
| 12(6) | Extracts from the register kept under section 186(9) may be furnished to any member on payment of the fee prescribed in the articles, not exceeding ten rupees for each page |
Three practical points follow from the text. First, the seven days run from the transaction itself (the loan, guarantee, security or acquisition), not from the Board meeting. Second, the register has "separate" parts for loans and guarantees given, securities provided and acquisitions made. Third, rule 12(6) is the member's right to extracts; the fee ceiling is ten rupees a page and the amount is fixed by the articles.
If the register is kept electronically, it should also meet the electronic-records safeguards in the Management and Administration Rules; see Rules 27 to 31. The Act's provisions on loans, investments and the register are explained in Section 186: Loans and Investments. To set up the register and its policy, see our compliance documentation service.
Rule 14: the MBP-3 register of investments not in the company's own name
Section 187 of the Act deals with investments held in the company's own name; see Section 187: Investments Held in Company's Own Name. Rule 14 provides the register:
- 14(1). Every company must, from the date of its registration, maintain a register in Form MBP 3 and enter in it, chronologically, the particulars of investments in shares or other securities beneficially held by the company but not held in its own name. The company also records the reasons for not holding the investments in its own name and the relationship or contract under which the investment is held in the name of any other person.
- 14(2). The company also records whether such investments are held in a third party's name for the time being or otherwise.
- 14(3). The register is maintained at the registered office, preserved permanently, and kept in the custody of the company secretary or, if there is no company secretary, any director or other officer authorised by the Board.
- 14(4). Entries are authenticated by the company secretary or any other person authorised by the Board.
Rule 14 does not list the cases in which a company may hold shares in another name; those are in section 187. Its work is to make the register complete, so that a reader of the register can see which securities the company owns beneficially, who holds them, why and under what arrangement.
Comparing the two registers
| Feature | MBP-2 (rule 12) | MBP-3 (rule 14) |
|---|---|---|
| Subject | Loans, guarantees, security and acquisitions of securities | Investments beneficially held but not in own name |
| Kept from | Date of incorporation | Date of registration |
| Entry timing | Within seven days of the transaction | Chronologically; no day limit in the rule |
| Place | Registered office | Registered office |
| Retention | Permanently | Permanently |
| Custody | Company secretary or person authorised by the Board | Company secretary; if none, any director or officer authorised by the Board |
| Authentication | Company secretary or person authorised by the Board | Company secretary or person authorised by the Board |
| Extracts for members | Rule 12(6): fee set in articles, up to ten rupees a page | Not provided in rule 14 |
A worked example
Orion Engineering Limited (invented) gives a loan to a supplier on 3 April and provides security for a group company's bank loan on 20 April. Each is entered in MBP-2 chronologically, within seven days of the transaction, and authenticated by the company secretary. In May the company records in MBP-3 that it beneficially holds shares in a joint venture that are registered in the name of a custodian, with the reason, the contract under which they are held and whether the third-party holding is temporary. A member asks for an extract from MBP-2; the company supplies it on payment of the fee fixed in its articles, within the ten-rupee ceiling.
Practical points
- Make the MBP-2 entry a step in the closing checklist for every loan, guarantee, security or acquisition. A seven-day rule is easily missed.
- Keep the loan details consistent with the disclosures in the financial statements and the special resolution total described in Rules 11 and 13.
- Reconcile MBP-3 with the demat and certificate records, at least annually.
- Related contracts and directors' interests go in the separate MBP-4 register; see Rules 16 and 17.
Need help with statutory registers?
A correct MBP-2 and MBP-3 are quick to set up and hard to rebuild years later. Our compliance documentation service can create the registers, backfill entries and prepare the authorisation resolution for the person who authenticates them.
Key takeaways
- MBP-2: loans, guarantees, security and acquisitions; entries within seven days; kept permanently at the registered office.
- MBP-3: investments beneficially held but not in the company's own name, with reasons and the contract or relationship.
- Both registers are authenticated by the company secretary or a person authorised by the Board.
- Members may obtain MBP-2 extracts at up to ten rupees a page.
- MBP-2 may be kept manually or electronically.
Read next
- Section 186: Loans and Investments
- Section 187: Investments Held in Company's Own Name
- Rules 11 and 13: section 186 loans, investments and special resolution
- Rules 16 and 17: register of contracts MBP-4 and loss of office
Disclaimer: Based on the Companies Act, 2013 rules (and the Companies (Auditor's Report) Order, 2020) named above as consolidated in the MCA e-book (consulted on 3 October 2026), with the later notifications the article names. Later amendments, fees, forms and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.