MCA Notification

MCA warrants new Form MGT-7 & MGT 7A for OPC & small companies

Form MGT-7

The Ministry of Corporate affairs came up with some crucial amendments vide a notification dated March 5, 2021. With this notification, the Ministry has amended a few provisions of the Companies (Management and Administration) Rules, 2014. With effect from 5th of March 2021, every company, except for OPC (One Person Company) and small company, will file its annual return in Form MGT-7, whereas OPC and small company would file their annual return in Form MGT-7A.

What is Form MGT-7?

MGT-7 is an electronic form allocated to companies by the MCA for filing details of their annual return. The Registrar of Companies maintains this e-form via electronic mode and on the basis of the statement provided by the company.

Companies (Management and Administration) Amendment Rules, 2021

With the amendment, the rule regarding filing the annual return with the registrar is sought to be substituted. According to the Companies (Management and Administration) Amendment Rules, 2021, the Ministry of Corporate Affairs substituted sub-rule (1) of the Rule 11 and Rule 12 of the Companies (Management and Administration) Rules, 2014.

MCA also prescribed for Form MGT-7 for annual return for companies apart from OPC and small companies and further notified Form MGT-7A for abridged annual return for One Person Companies and small companies.

What is the purpose of Form MGT-7 and Form MGT-7A?

Every company should prepare an annual return in MGT-7 containing the particulars.

The trader is required to furnish the below-mentioned details in the new form MGT-7 and MGT-7A:

  • Details of company registration;
  • Principal business activity of the company;
  • Share capital, debentures, and other securities of the Company;
  • Turnover and net worth of the company;
  • Shareholding pattern;
  • Number of promoters, members, and debenture holders;
  • Director details;
  • Details of the members of the company;
  • Remuneration of directors and key managerial personnel;
  • Details of penalty and punishment.
READ  MCA proposed the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020

A look at the pre and post amendment

The analysis of pre and post amendment is specified in the table made below:

S.NO.

RULE

PRE-AMENDMENT

POST-AMENDMENT

 

1

 

 

 

Rule 11 (1) of Companies (Management and Administration) Rules, 2014

 

 

Every company will prepare its annual return in MGT-7 Form

 

 

Every company will prepare its annual return in MGT-7 Form except One Person Company and Small Company.

 

One Person Company and Small Company will file annual return from the Financial year 2020-21 onward in MGT-7A Form.

 

 

2

 

Rule 12 of Companies (Management and Administration) Rules, 2014

 

The extract of the annual return, which is to be attached with the board’s report will be in Form MGT-9

 

Provided that a company will not be required to attach the extract of the annual return with the report of board  in Form MGT-9 if the web link of such annual return has been disclosed in the board’s report as per sub-section (3) of section 92 of the Companies Act of 2013.

 

The copy of the annual return will be filed with the registrar with fee as prescribed.

 

A copy of annual return will be filed with the registrar with fees as may be specified

 

 

 

3

 

Rule 20 after proviso in sub rule (2) of Companies (Management and Administration) Rules, 2014

 

Explanation- For the purpose of the sub-rule, “Nidhi” means a company that is incorporated as Nidhi with the objective of cultivating the habit of thrift and savings among its members, receiving deposits from and lending to, its members only, for their mutual benefit and which complies with the rules prescribed by Central Government for the regulation of such class of companies.

 

Explanation-I-

For the purpose of the sub-rule, “Nidhi” means a company that is incorporated as Nidhi with the objective of cultivating the habit of thrift and savings among its members, receiving deposits from and lending to, its members only, for their mutual benefit and which complies with the rules prescribed by the Central Government for the regulation of such class of companies.

 

Explanation-II-

**This has been inserted, which defines the expressions mentioned below-

·        Agency;

·        Cut-off date;

·        Cyber security;

·        Electronic voting system;

·        Remote e-voting;

·        Secured system;

·        Voting through electronic means.

READ  Web-Based KYC Verification Service for Directors by MCA

** These terms were omitted vide Companies (Management and Administration) Amendment Rules, 2016, but now the Ministry of Corporate Affairs has restored it with the present amendment. 

How to file Form MGT-7/MGT-7A?

It can be filed on the MCA portal by following the steps mentioned below:

  • The applicant requires accessing the official website of the Ministry of Corporate Affairs in order to file this form. By logging in to the portal, the applicant can upload MGT-7/MGT-7A;
  • Enter a valid “Corporate Identity Number” for cancelling unused issued shares of one class and increase in share capital;
  • Select the e-form purpose from the drop down menu, and in case of others, specify the entity in the description box.

Conclusion

The amendment brought in by the Ministry of Corporate Affairs[1] has put to rest queries relating to annual return and e-voting. Annexing extract of the annual return is past. The annual return in Form MGT-7/MGT-7A is required to be uploaded on the company’s website, and the web link of it to be provided in the Board’s report. 

Read our article:Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021

Trending Posted

Get Started Live Chat