Form MGT-7 – Annual Return
Table of Contents
All companies are required to submit Form MGT-7 in a timely manner to comply with regulations. Failure to do so may result in penalties. Annual General Meeting The deadline for holding the annual general meeting is no later than September 30th after the fiscal year ends. Therefore, the usual deadline for submitting Form MGT-7 is November 29th. This article discusses the process of submitting Form MGT-7 extensively.
Penalty for Not Filing MGT-7
The If you fail to submit your yearly paperwork, you will face consequences.In 2018, the penalty for late returns went up to Rs. 100 per day. Therefore, it is important to make sure all MCA annual or income tax returns are submitted on time. Information Filed in Form MGT-7
In Form MGT-7, the company is required to disclose specific details regarding the financial year for which the form is being submitted.
- Head office, main operations, details of any companies it holds, has a controlling interest in, or is affiliated with.
- Stocks, bonds, and other financial instruments, as well as ownership structure.
- Details of indebtedness.
- Information about the individuals and organizations holding membership and debentures, including any alterations made since the end of the last fiscal year.
- Promoters, board members, important management personnel, and any changes in their roles since the end of the last fiscal year.
- Gatherings of members or a specific group, as well as the Board and its different committees, including information on who attended.
- Compensation for directors and top management staff.
- The consequences faced by the company, its directors, or officers including fines or other penalties, as well as information on how offenses can be settled through compounding and the process of appealing these penalties.
- Issues regarding obtaining a certification of compliance and making necessary disclosures as required by regulations.
- The company’s distribution of ownership among shareholders; and any other necessary topics.
Before filling out form MGT-7, it is necessary to gather financial and operational information from the previous financial year. This includes obtaining a copy of the company’s audited financial statement.
Documents Filed in Form MGT-7
The documents required to be submitted along with Form MGT-7 are as follows:
- If the company has issued shares, it is required to maintain a list of shareholders and debenture holders.
- If the deadline for holding the AGM were extended, it would be necessary to issue an approval letter for the extension.
- A listed company or a company with a paid-up share capital of Ten Crore rupees or more, or a turnover of Fifty Crore rupees or more will be required to have a copy of MGT-8.
Signing MGT-7
Director can sign MGT-7 of small companies, in case of companies other than small companies, a company secretary in wholetime practice has to sign MGT-7 form using his own digital signature.
Section 92 of the Companies Act
Section 92(1) of the Companies Act outlines the requirements for submitting MGT-7 or annual returns for the company. The text of Section 92 is provided below for your convenience.
Section 92(1) states that all companies are required to create an annual return in the prescribed form, containing details as they were at the end of the financial year about…
The company’s official headquarters, main business operations, and information regarding its relationships with other holding, subsidiary, and associate companies.
(b) the company’s stocks, bonds, and other financial instruments, as well as its ownership structure.
(c) its indebtedness;
(d) the individuals who are part of the organization and those who hold debentures, as well as any updates or changes that have occurred since the end of the last financial year.
(e) individuals who promote, direct, and manage the company, as well as any changes in these positions since the end of the last financial year.
(f) gatherings of members or a specific group, Board and its different subcommittees, including information on who attended.
(g) compensation for directors and key management personnel.
(h) the consequences or disciplinary actions enforced on the company, its directors or officers, as well as information about the settlement of offenses and challenges raised against the penalty or punishment.
(i) issues related to certification of conformity, disclosures as required by regulations;
(j) prescribed details regarding shares owned by Foreign Institutional Investors, including their names, addresses, countries of incorporation, registration details, and the percentage of shares they hold.
Other issues that are required to be specified and approved by a director and the company secretary, or if there is no company secretary, by a practicing company secretary.
Provided that in relation to One Person Company and small company, the company secretary shall sign the annual return, or where there is no company secretary, by the company director.