In India, all companies registered under the Companies Act, 2013, must keep proper records and submit annual returns to the Registrar of Companies (ROC). They file the annual return through either Form MGT-7 or, for certain companies, the newer, simplified Form MGT-7A. This article will help you understand the purpose, who needs to file which form, the differences between them, and the requirements for filing.
What is Form MGT-7?
Form MGT-7 is an electronic form mandated by Section 92 of the Companies Act, 2013. It serves as the annual return that companies file with the Ministry of Corporate Affairs (MCA). This form gives a comprehensive overview of the company’s status at the end of its financial year, including:
- Basic company information (such as its Corporate Identification Number, name, and registered office address)
- Main business activities
- Details of directors and key managerial personnel
- The company’s shareholding structure
- Information on its debts
- Remuneration paid to directors and key management staff
- Any penalties or legal cases the company might be involved in
Filing MGT-7 is generally compulsory for almost all companies, with a few exceptions that we’ll cover later.
What is Form MGT-7A?
To ease the compliance burden for smaller entities, the MCA introduced Form MGT-7A in 2021.This is a streamlined version of MGT-7, specifically designed for small companies and One Person Companies (OPCs).While it covers similar ground to MGT-7, it demands less detailed information, simplifying the annual filing process for businesses with fewer complexities.
Who Needs to File MGT-7 and MGT-7A?
The type of form a company needs to file depends on its nature and size.
Applicability of Form MGT-7:
- Private Limited Companies (unless they qualify as small companies or OPCs)
- Public Limited Companies
- Section 8 Companies (non-profit organizations)
- Producer Companies
- Foreign Companies operating in India
Essentially, if a company isn’t a small company or an OPC, it needs to file MGT-7.
Applicability of Form MGT-7A:
- Small Companies
- One Person Companies (OPCs)
Filing Deadlines of Form MGT-7 & MGT-7A
Both MGT-7 and MGT-7A share the same filing deadline:
- You must file the form within 60 days from the date of the Annual General Meeting (AGM), or if the company does not hold the AGM, within 60 days from the last date by which the AGM was required to be held (typically September 30th). If the company doesn’t hold an AGM, you must file the form within 60 days from the date the AGM should have been held (typically September 30th of the financial year).
- For OPCs, which do not hold AGMs, the due date is 60 days from September 30th (which is November 29th).
Key Differences Between MGT-7 and MGT-7A
| Feature |
MGT-7 |
MGT-7A |
| Applicable To |
All companies except small companies and OPCs |
Small companies & OPCs |
| Disclosure Needs |
Extensive and detailed |
Simplified, less detail required |
| Complexity |
High |
Low |
| Time to File |
60 days from AGM |
Same as MGT-7 |
Important Points to Remember
- Certification Requirement: Companies with a paid-up capital of ₹10 crore or more, or a turnover of ₹50 crore or more, must have their MGT-7 certified by a practicing Company Secretary (PCS). However, MGT-7A for small companies and OPCs does not require PCS certification, making the process simpler.
- Penalties for Not Filing: Filing the form late incurs a penalty of ₹100 per day until you complete the filing. This penalty has no upper limit and can become substantial for significant delays.
- Mode of Filing: The company files both forms electronically through the MCA portal. A director or key managerial personnel must sign them using the company’s Digital Signature Certificate (DSC) and approve them.
Benefits of Timely and Accurate Filing of Form MGT-7 & MGT-7A
- Helps maintain the company’s good standing with the ROC.
- Prevents the accumulation of hefty penalties.
- Facilitates smoother processing of loan applications and funding.
- Ensures transparency with shareholders and regulatory bodies.
Common Mistakes to Avoid
- Incorrectly assuming an OPC needs to file MGT-7 instead of MGT-7A.
- Missing filing deadlines due to misunderstandings about AGM dates.
- Wrongly classifying a company as “small.”
- Not accurately updating changes in directorship or shareholding.
- Failing to attach all necessary supporting documents.
It’s always advisable to double check eligibility and compliance requirements, or consult with a professional, to avoid these errors.
Conclusion
Understanding whether your company needs to file MGT-7 or MGT-7A is vital for compliance with Indian corporate laws. While MGT-7 is the standard for most companies, MGT-7A streamlines the process for smaller businesses and OPCs. Knowing which form applies to you can save time, reduce your compliance burden, and help you avoid legal or financial repercussions. Companies should regularly review their classification status and ensure the correct form is filed on time. When in doubt, seeking advice from a company secretary or legal advisor is always a good idea.
Suggested Read :
Essential Taxes for Pvt Ltd Company
Pvt Ltd Company Compliance Checklist
Check the annual filing status for company
Financial Statements for OPC Annual Filing
ROC Compliance Form For Pvt Ltd Company
FAQ
1. Is MGT-7A applicable to a private limited company with turnover below ₹40 crore?
Yes, but only if the company also has a paid-up capital of less than ₹40 crore and is not a holding or subsidiary company. If all these conditions are met, it qualifies as a small company and can use MGT-7A.
5. Is there any government fee for filing MGT-7 or MGT-7A?
Yes, a nominal government fee is applicable, which varies based on the company’s share capital.Filing delays will result in additional late fees.
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