Learn how to file the essential annual return using Form MGT-7 in India. Stay compliant and transparent with our comprehensive guide.

Overview:

After successfully registering a company, it’s essential to comply with the legal requirement of submitting an annual return to the Registrar of Companies (ROC). This annual return, usually due on March 31st each year, entails vital details about the company, its shareholders, directors, and more. The submission of this comprehensive report is mandated by law and is facilitated through Form MGT-7, an electronic document provided by the Ministry of Corporate Affairs. In this guide, we’ll delve into the intricacies of annual return filing using Form MGT-7.

Annual Return Filing: Ensuring Compliance and Transparency

The annual return is a crucial document for any company, encompassing vital elements such as the company’s share capital, debts, directors, and shareholders. As per the Companies Act of 2013, it is mandatory for companies to prepare and submit their annual returns to the Registrar of Companies (RoC) annually. This filing requirement is imperative to avoid significant penalties.

To validate the annual return, it must be signed by the Director and the Company Secretary using their Digital Signatures. In cases where the company hasn’t appointed a Company Secretary, a practising Company Secretary can provide the required signature. However, for One Person Companies (OPC) or small companies, the Director’s signature alone suffices. The mandatory annual return filing is executed through Form MGT-7, providing a comprehensive outline of the company’s essential details.

Understanding Form MGT-7: The Annual Return Document

Form MGT-7 is a critical document that registered companies in India must file annually. It contains essential information about the company, including its registered office, details of shareholders, directors, and more. This form offers a snapshot of the company’s status at the end of the financial year.

The purpose of filing Form MGT-7 is to ensure transparency and compliance with regulatory requirements. It aids regulatory authorities and stakeholders in comprehending the company’s structure, activities, and key personnel. Companies need to complete and submit this form within a specified timeframe. The filing fee for Form MGT-7 varies based on the company’s nominal share capital. The form is submitted electronically through the Ministry of Corporate Affairs portal, and any delays can lead to penalties.

Who is Required to Submit Form MGT-7?

Every registered company in India, whether private or public, is obligated to file Form MGT-7 annually. The filing of Form MGT-7 is an integral part of a company’s annual return.

Form No. MGT-7 – Annual Return (Excluding OPCs and Small Companies)

According to the Companies (Management and Administration) Amendment Rules, 2021, each company must submit its annual return using Form No. MGT-7, except for One Person Companies (OPCs) and Small Companies.

Form No.MGT-7A – Annual Return for OPCs and Small Companies

Introducing Form No. MGT-7A – Condensed Annual Return for OPCs and Small Companies. Starting from the fiscal year 2020-2021, both One Person Companies and Small Companies must submit their annual return using Form No. MGT-7A, similar to the streamlined procedures available for online company registration.

Therefore, every company, including OPCs, must complete and submit Form MGT-7 as part of their annual return filing process.

Key Dates and Filing Fees

Form MGT-7 should be submitted within 60 days from the company’s Annual General Meeting, which must be held on or before the 30th day of September, following the end of each financial year. Consequently, the typical deadline for filing Form MGT-7/MGT-7A is usually November 29th each year.

The filing fee for MGT-7 is determined based on the company’s nominal share capital, starting at ₹ 200 for companies with a Share Capital of less than 1,00,000. The fee amount increases as the share capital of the company increases. A comprehensive list of fees can be found here. This fee must be remitted while submitting the annual return (MGT-7) to the Registrar of Companies (ROC). The MGT-7 Filing Fee stands at ₹ 200 for companies without share capital.

Penalties for Non-Filing of MGT-7/MGT-7A

The penalty for the non-filing of an annual return was notably raised in 2018 to ₹ 100 (One Hundred Rupees) per day of non-compliance. Thus, it is imperative to guarantee that the annual return in this form is lodged before the stipulated due date.

Unveiling the Purpose of e-Form MGT-7

The e-Form MGT-7 acts as a repository for an annual return that every company must compile. This return encapsulates particulars reflecting the company’s status at the end of the financial year. It comprehensively captures crucial aspects such as:

• Registered office address, principal business activities, and information concerning holding, subsidiary, and associate companies.
• Shares, debentures, other securities, and the configuration of shareholding within the company.
• Indebtedness level of the company.
• Members and debenture-holders, incorporating any alterations since the preceding financial year’s closure.
• Promoters, directors, key managerial personnel, and any modifications to their status since the prior financial year’s end.
• Records of meetings involving members or specific classes, the Board, and its assorted committees, alongside attendance records.
• Remuneration details for directors and key managerial personnel.
• Notable penalties or sanctions imposed on the company, its directors, or officers, including compounding offenses and appeals against such penalties or punishments.
• Matters concerning certifications of compliance and prescribed disclosures.
• Overview of the company’s shareholding pattern.
• Any other stipulated matters as required by the form.
• The e-Form MGT-7 offers a comprehensive snapshot of the company’s activities and structure at the close of the financial year.

Necessary Attachments for Form MGT-7 Submission

When completing this e-form, including scanned copies of documents as attachments is essential. These attachments will be uploaded at the form’s conclusion under the designated section. The required attachments encompass the following:

• List of shareholders and debenture holders.
• Approval letter about extending the Annual General Meeting (AGM).
• Copy of MGT-8.
• Any optional attachment(s), if applicable.

Submission Process: A Step-by-Step Guide

The process of submitting Form MGT-7 or MGT-7A on the MCA portal can be accomplished through the following steps:

• Access the Official Website: Visit the Ministry of Corporate Affairs’ official website and log in to the portal. Once logged in, proceed to upload Form MGT-7.
• Enter Corporate Identity Number (CIN): Upon logging in, provide a valid Corporate Identity Number (CIN) for tasks such as cancelling unused issued shares of one class and increasing share capital.
• Choose Purpose and Provide Details: From the drop-down menu, select the purpose of the eForm. If ‘Others’ is set, provide entity details in the description box.
• Declaration and Designation: Opt for one of the available options from the drop-down list for representation. Digitally sign Form MGT-7/7A accordingly.
• If the person signing digitally is a Director, provide the approved DIN.
• If the person signing digitally is a Manager, input the approved DIN or valid income-tax PAN.

When a Company Secretary signs digitally, enter the membership number.

• Upload Documents: Utilise the attach button to upload the required documents. Proceed to make the fee payment by clicking on the payment button.
• Form Submission and Processing: After successfully submitting Form MGT-7, the Registrar of Companies office will process the eForm.
• SRN Generation: A Service Request Number (SRN) will be generated and presented to the applicant upon successful submission. This SRN will be essential for future interactions with the MCA.
• Challan Generation: A challan will be generated after submission, displaying the fee details paid by the user to the Ministry. This serves as an acknowledgment that Form MGT-7 has been filed, similar to the process followed in Pvt Ltd company registration online.
• Acknowledgment: Following complete processing by the authority, an acknowledgment will be sent to the company’s official email address regarding Form MGT-7.

Filing Form MGT-7 or MGT-7A can be effectively completed by following these steps, ensuring compliance with the regulatory requirements.

Effortless Annual Return Filing with Vakilsearch

Simplifying the process of annual return filing is crucial to ensure smooth operations for any company. At Vakilsearch, we understand the complexities involved in the compliance process. Our team of seasoned professionals specialises in ensuring a seamless and error-free submission of Form MGT-7. By choosing Vakilsearch, you can confidently navigate the regulatory landscape, knowing that your annual return is in capable hands.

In conclusion, understanding and adhering to the process of annual return filing using Form MGT-7 is crucial for any company operating in India. By following the guidelines and utilising the right resources, companies can ensure compliance, avoid penalties, and maintain transparency in their operations.