Form MGT-9 is an extract of a company’s annual return that provides key information about its shareholding, directors, promoters, and other governance matters. It was introduced under the Companies Act, 2013, to promote transparency and accountability in corporate reporting. However, its applicability has seen changes over time due to amendments in compliance requirements.
This blog explains what Form MGT-9 is, when and to whom it applies, and key points companies should keep in mind regarding its preparation and filing.
Introduction
Annual compliance is a critical part of running a company in India. As part of this process, companies are required to file an annual return, which provides details about their shareholding structure, directors, promoters, meetings, and related corporate governance aspects.
Form MGT-9 is essentially a summary or extract of this annual return. It is designed to offer shareholders and other stakeholders a snapshot of a company’s key data for a given financial year. For many years, companies were required to include Form MGT-9 in their Board’s Report or provide a web link to it.
However, with regulatory changes, especially after the Companies (Amendment) Act, 2017 and related rules, the requirements regarding Form MGT-9 have evolved.
What is Form MGT-9?
Form MGT-9 is prescribed under Section 92(3) of the Companies Act, 2013, read with Rule 11 of the Companies (Management and Administration) Rules, 2014.
It contains –
- The company’s registered office and principal business activities
- Details of holding, subsidiary, and associate companies
- Shareholding pattern of promoters, directors, and top shareholders
- Changes in shareholding during the year
- Indebtedness
- Remuneration of directors and key managerial personnel
- Penalties or punishment imposed on the company or its officers
Originally, the idea behind MGT-9 was to provide shareholders with a ready reference to important company data without needing to access the full annual return filed with the Registrar of Companies (ROC).
Original Applicability of Form MGT-9
When the Companies Act, 2013 first came into force, Section 92(3) required all companies (other than One Person Companies and Small Companies) to –
- Attach an extract of the annual return (Form MGT-9) to the Board’s Report
OR - Provide a web link where the full annual return or MGT-9 is available
This meant every eligible company had to either reproduce MGT-9 in its annual report or ensure it was accessible online.
Changes Brought by the Companies (Amendment) Act, 2017
The Companies (Amendment) Act, 2017 introduced a key change –
- Instead of mandatorily attaching MGT-9 to the Board’s Report, companies could simply provide the web address of the annual return (as filed on the MCA portal).
This change came into effect from 28 August 2020 via the Companies (Management and Administration) Amendment Rules, 2020.
Current Applicability of Form MGT-9
For companies with a functional website –
If a company places its annual return (in Form MGT-7) on its website, it does not need to attach Form MGT-9 to the Board’s Report. It must only provide the web link in the report.
For companies without a website –
If a company doesn’t maintain a website, it should still attach MGT-9 as part of the Board’s Report or make the annual return accessible otherwise.
Exemptions –
- One Person Companies (OPCs) and Small Companies have always been exempt from attaching MGT-9.
- Private companies that are small or OPCs also benefit from relaxed requirements.
Key Point – While MGT-9 is not mandatory for inclusion in the annual report if the web link of the annual return is provided, companies still prepare the extract for internal records or on stakeholder request.
What Should Companies Do Now?
- Maintain a copy of Form MGT-9 or a full MGT-7 return as part of annual records.
- Upload the annual return (MGT-7) on the company’s official website, if one exists.
- Mention the exact web link in the Board’s Report where stakeholders can access the return.
Common Mistakes to Avoid
- Providing an incorrect or inactive web link – This defeats the purpose and may be considered non-compliance.
- Failing to upload the annual return on the website but also skipping MGT-9 – This can lead to penalties.
- Assuming all companies must file MGT-9, Small companies and OPCs are exempt.
Conclusion
Form MGT-9 was introduced as a tool to promote transparency and provide shareholders with easy access to key company data. With the Companies (Amendment) Act, 2017, and subsequent rules, the compliance burden has been simplified. Now, companies with a functional website can skip attaching MGT-9 to their Board’s Report, provided they offer a clear web link to their annual return.
For companies without a website or those wanting to maintain high standards of disclosure, preparing and sharing Form MGT-9 still remains a good practice. As always, companies should stay updated on regulatory changes to avoid compliance lapses.
Reference
The Companies Act of 2013 (Act No. 18 of 2013)
The Companies (Management and Administration) Rules, 2014
https://www.mca.gov.in/
