MGT-7 – Annual Return under the Companies Act
Filing an annual return is a crucial compliance requirement for every company registered under the Companies Act, 2013 or the Companies Act, 1956. This article provides an in-depth overview of Form MGT-7, the Annual Return, its filing procedure, penalties for non-compliance, and essential details to help you navigate the process seamlessly.
What is Form MGT-7?
Form MGT-7 is the Annual Return that companies are mandated to file with the Ministry of Corporate Affairs (MCA) every year. This form contains vital information about the company, including its financial status, ownership structure, and governance. Filing the Annual Return is an essential part of corporate compliance under the Companies Act, 2013.
Who is Required to File Form MGT-7?
Under the Companies Act, all companies except One Person Companies (OPCs) are required to file the annual return. The return must be filed within 60 days from the conclusion of the Annual General Meeting (AGM). The companies affected by this rule include:
- Private Limited Companies
- Limited Companies
- Section 8 Companies
- Public Limited Companies (except OPCs)
Due Dates and Filing Timeline
The timeline for filing Form MGT-7 is linked to the conclusion of the AGM. Here’s a breakdown of the key dates:
- AGM Due Date: The AGM must be held within six months of the end of the financial year (March 31st), with the first AGM to be held within 18 months of incorporation.
- MGT-7 Filing: The form must be filed within 60 days from the AGM date. This includes submitting information like the balance sheet, profit and loss account, and other compliance details.
For example:
- If your financial year ends on March 31, the AGM must be held by September 30. The filing of Form MGT-7 should then be completed by November 30.
Key Information Included in Form MGT-7
Form MGT-7 requires a variety of information about the company. Key details include:
- Financial Statements: The balance sheet and profit & loss account for the year.
- Shareholding Information: A list of shareholders, their shareholding percentage, and details of transfers or transmission of shares.
- Registered Office: Address and contact details of the company’s registered office.
- Directorship Changes: Information about any changes in the board of directors during the financial year.
- Share and Debenture Details: Complete information about the company’s shares and debentures.
- Compliance Certificate: A certificate confirming that the company has adhered to all necessary statutory provisions.
Signing the Annual Return (MGT-7)
The signing of the Annual Return varies depending on the company’s structure:
- For Companies with a Company Secretary: The return must be signed by a director and the company secretary.
- For Companies without a Company Secretary: If there is no company secretary, a director must sign the return.
- For One Person Companies (OPCs): The return must be signed by the sole director or the company secretary, if any.
Penalties for Delayed Filing
Failing to file Form MGT-7 within the prescribed time can lead to penalties. The late fee for filing the annual return is Rs. 100 per day from the due date. This penalty applies as per the revised provisions introduced in May 2018. Here’s a breakdown of the penalty structure:
- Before June 30, 2018: The penalty would depend on the specific forms due for filing during this period.
- After June 30, 2018: A flat late fee of Rs. 100 per day for every day the filing is delayed beyond the due date.
It’s critical to avoid these penalties by ensuring timely compliance.
Filing MGT-7: Step-by-Step Process
- Preparation of Financial Statements: Ensure that your company’s financial statements, including the balance sheet and profit & loss account, are prepared accurately.
- Check AGM Dates: Verify that the AGM is held within the stipulated timeline, which is within 6 months from the end of the financial year.
- Log into MCA Portal: Visit the MCA portal to access Form MGT-7.
- Complete Form MGT-7: Fill in the required details about your company, shareholders, directors, and shareholding structure.
- Upload and Submit: After completing the form, upload it along with necessary attachments, and submit the form on the MCA portal.
- Payment of Fees: Pay the applicable fees based on your company type and the filing date.
Conclusion
Filing Form MGT-7 is a vital aspect of corporate governance and compliance for every company. By adhering to the timelines and providing accurate information, companies can ensure smooth filings and avoid penalties. Make sure to file the Annual Return on time to maintain good standing with the Ministry of Corporate Affairs (MCA).
If you’re unsure about the filing process or need assistance with preparing your company’s financial statements or compliance documents, consider consulting with a professional like a Chartered Accountant to streamline the filing process.