Annual return filing is a statutory requirement under Section 92 of the Companies Act, 2013. Every company incorporated in India must file its annual return with the Registrar of Companies (ROC), providing detailed disclosures about its management structure, shareholding, governance practices, and financial status. Until recently, all companies were required to file the Form MGT-7. However, to reduce the compliance burden on smaller entities, the Ministry of Corporate Affairs (MCA) introduced Form MGT-7A – a simplified version of the annual return, applicable only to certain categories of companies.
This blog provides an in-depth comparison between MGT-7 and MGT-7A, covering legal provisions, eligibility, filing timelines, and penalties.
Annual Return Filing
Section 92(1) of the Companies Act, 2013 requires every company to prepare an annual return and file it with the ROC. The return shows the details of the company at the end of the financial year and is filed in the prescribed format, either MGT-7 or MGT-7A, depending on the company’s classification.
The objective behind introducing MGT-7A
Initially, all the companies, including private limited and one-person companies, were required to file the same annual return, MGT-7, regardless of their size or operations. This resulted in unnecessary compliance burdens, especially for smaller entities such as One Person Companies (OPCs) and small companies.
To address this issue and to facilitate the annual return filings, the MCA introduced Form MGT-7A through the Companies (Management and Administration) Amendment Rules, 2021, to provide a simplified filing process and contain fewer disclosure requirements for eligible companies.
Applicability of MGT-7 and MGT-7A
Form MGT-7
Form MGT-7 is applicable to all companies except:
- One Person Companies (OPCs)
- Small companies
This includes:
- Public limited companies
- Private limited companies that are not classified as small companies
- Section 8 companies (non-profits)
- Holding and subsidiary companies
- Foreign companies operating in India
Form MGT-7A
Form MGT-7A is applicable only to:
- One Person Companies (OPCs)
- Small companies, as defined under Section 2(85) of the Companies Act, 2013
A small company is a private company that:
- Has a paid-up share capital of not more than ₹2 crore (can be prescribed up to ₹10 crore), and
- Has a turnover of not more than ₹20 crore (can be prescribed up to ₹100 crore)
Exceptions: Even if a company meets the above thresholds, it will not be considered a small company if it is:
- A holding or subsidiary company
- A company registered under Section 8
- A company governed by any special Act
Differences Between Form MGT-7 and MGT-7A
| Form MGT-7 | Form MGT-7A | |
| Applicability | Mandatory for all companies except One Person Companies (OPCs) and small companies | Applicable only to OPCs and small companies as defined under Section 2(85) |
| Legal Framework | Governed under Rule 11(1) of the Companies (Management and Administration) Rules, 2014 | Introduced under the Companies (Management and Administration) Amendment Rules, 2021 |
| Certification Requirement | Companies with paid-up share capital ≥ ₹10 crore or turnover ≥ ₹50 crore must attach MGT-8 | MGT-8 is not applicable – no CS certification required |
| Signing Authority | Must be signed by the Director and Practising Company Secretary (in certain cases) | Signed by a Director only |
| Attachments Required | Includes list of shareholders, resolutions, meeting details, MGT-8 (if applicable), etc. | Minimal – generally a list of shareholders and director info |
| Applicability to Section 8 Companies | Applicable to Section 8 (non-profit) companies | Not applicable |
| Time for Filing | Within 60 days of AGM or the last date when AGM should have been held | Same – within 60 days, even if AGM is not required for OPC |
| Financial Statement Summary | Requires financial details like profit and loss, share capital changes, etc. | No need to disclose full financial breakdown |
| Board & General Meetings | Must report the number, type, and attendance of meetings | Not mandatory unless the company voluntarily includes it |
| Reporting of Shareholding Changes | Mandatory to disclose changes in promoters’ and top 10 shareholders’ shareholding | Optional and simplified disclosures |
| Beneficial Ownership Disclosure | Required where applicable as per Rule 9 of Companies (Management and Administration) Rules, 2014 | Not required |
| Suitability | Ideal for public companies, large private companies, and companies with complex structures | Suitable for micro or small private companies with simple shareholding and management |
| Certification by PCS | Mandatory in several cases, depending on size and structure | Not required |
| Preparer’s Expertise Required | Often prepared with help from professionals (CA/CS) | Can be filed independently by the director with basic knowledge |
| Filing Fees | Filing fees based on share capital slab as per Companies (Registration Offices and Fees) Rules, 2014 | The same structure applies – no difference in fee rules. |
Due Dates for Filing MGT-7 and MGT-7A
The due date for filing both forms is:
- Within 60 days from the date of the Annual General Meeting (AGM).
- If the company is not required to hold an AGM (as in the case of OPCs), the return must be filed within 60 days from the last date on which the AGM would have been held.
For most companies whose financial year ends on March 31, the last date to hold the AGM is September 30, making the filing due by November 29.
Documents Required for Filing
For MGT-7:
- List of shareholders and debenture holders
- List of directors and key managerial personnel (KMP)
- MGT-8 certificate (for applicable companies)
- Details of meetings and attendance
- Extract of board resolutions, if applicable
- Changes in shareholding or directorships
- CSR disclosures (if applicable)
For MGT-7A:
- List of shareholders and debenture holders
- List of directors
- Optional AGM extension letter (if applicable)
The number of disclosures and attachments is much fewer in MGT-7A, reducing the filing effort.
Certification Requirements
For Form MGT-7, companies with:
- Paid-up share capital of ₹10 crore or more, or
- Turnover of ₹50 crore or more
must also attach Form MGT-8, which is a certification of the annual return by a practising Company Secretary.
Form MGT-7A, on the other hand, does not require MGT-8. It can be signed and filed by the director of the company alone using a Digital Signature Certificate (DSC).
Penalty for Non-Filing
The Companies Act, 2013, imposes strict penalties for late or non-filing of annual returns.
Late Fee:
- A flat penalty of ₹100 per day of delay is levied.
- No maximum cap—delays can lead to heavy financial burdens.
Penalty under Section 92(5):
If a company fails to file its annual return:
- The company is liable to a penalty of ₹10,000, and
- A further ₹100 per day up to a maximum of ₹2,00,000
- Every officer who is in default is liable to a penalty of ₹10,000, plus ₹100 per day, up to ₹50,000
Prolonged default for three consecutive financial years can also lead to:
- Disqualification of directors under Section 164
- Inactivation of DIN
- Restriction on holding directorship in any company for 5 years
Conclusion
If you are an OPC or a small company, MGT-7A is the right form for you— simpler, faster, and cost-effective. For all other companies, MGT-7 remains mandatory and may involve detailed disclosures and certification. Before proceeding with your annual return filing, evaluate your eligibility, gather accurate data, and file well within the deadline to maintain a healthy compliance record.
