Abridged Annual Return (Form MGT-7A)  for Small Company & OPC

Form MGT-7A is a smaller form of annual return that the Ministry of Corporate Affairs (MCA) has implemented specifically since the financial year 2020-21 to be used by Small Companies and one person companies (OPC). In the past, every company, irrespective of size and type of business, had to submit Form MGT-7, which was lengthy and comprehensive. The government introduced Form MGT-7A under the Companies Act, 2013, as a way of reducing compliance burden.

This blog details the purpose, applicability, filing, due dates, and documents that are needed in Form MGT-7A, as well as penalties related to non-filing.

What is Form MGT-7A?

Form MGT-7A is the short version of the annual return, which entails the fundamental data of the company with respect to a certain financial year. Form MGT-7A requires fewer details than form MGT-7, which is detailed and obligatory in larger firms and is mandatory.

The introduction of this form indicates the effort made by the government to facilitate the ease of doing business, and compliance costs are lower for smaller entities.

Applicability of Form MGT-7A

Form MGT-7A is to be filed by the following types of companies:

• One Person Companies (OPC) registered under the Companies Act, 2013.
• Small Companies as understood in Section 2(85) of the Companies Act, 2013.

According to the most recent amendments, a Small Company is one that satisfies the following two requirements:

• Paid-up share capital is not more than Rs. 4 crore.
• The turnover is not more than Rs. 40 crore.

All the companies that fail to fall within these classifications are obliged to submit Form MGT-7

Important Information on Form MGT-7A

Form MGT-7A is in an abridged form, yet it also needs some fundamental information, like:

1. Basic company information (CIN, name, registered office).
2. Key business operations.
3. Company shareholding pattern.
4. Information on members and holders of debentures.
5. Indebtedness of the company.
6. Information about directors and other important staff.
7. Corporate certification (where necessary).

Due Date for Filing Form MGT-7A

Form MGT-7A is due:

1. During the 60 days after the Annual General Meeting (AGM).
2. In the event that no AGM is conducted, then within 60 days of the day when the AGM is supposed to be conducted.

In the case of OPCs and Small Companies, AGMs are optional. Thus, it is due 60 days after the end of a six-month period in the financial year (i.e., 28th November annually for companies having a financial year from April to March).

Documents Required for Form MGT-7A

The documents that are usually required in filing Form MGT-7A are as follows:

1. Shareholders as at the end of the financial year.
2. Directors’ list as at the end of the financial year.
3. Information on changes in shareholding in the year.
4. Copy of board resolutions, as may be necessary.
5. Digital Signature Certificate of Director (DSC).
6. An accountant member of the Company Secretary (in some cases).

Form MGT-7A: Step-by-Step Filing Process

Step 1: Download the Form

Visit the official MCA portal and get the most recent version of Form MGT-7A.

Step 2: Fill in Company Information

Please provide some basic information like CIN, name, address of registered office and email ID.

Step 3: Enter Share Capital and Member Information

Add information on issued, subscribed and paid-up share capital and shareholder details.

Step 4: Include Data of Directors and key Managerial Personnel

Provide the names, DIN and designation of the directors and KMPs where applicable.

Step 5: Indebtedness Details

In case the company owes anyone any loan, borrowing, or debt, give the information in the designated sections.

Step 6: Add Supporting Documents

Include lists of shareholders, lists of directors and other supplementary materials.

Step 7: Digital Signature

Attach the Digital Signature Certificate (DSC) of the director of the company. Attach the DSC of the Company Secretary in practice in the case the form has to be certified.

Step 8: Upload to MCA Portal

Filing in the form will require a specified fee and it must be uploaded at the portal of MCA.

Filing Fees for Form MGT-7A

Form MGT-7A has the following filing charges based on the share capital of the company:

1. Up to Rs. 1,00,000 share capital: Rs. 200
2. 1,00,000 – Rs. 4,99,999 share capital: Rs. 300
3. 5,00,000 – Rs. 24,99,999 share capital: Rs. 400
4. 25,00,000 – Rs. 99,99,999 share capital: Rs. 500
5. 1 crore or above: Rs. 600

Consequences of Non-Filing of MGT-7A

In case a company does not submit Form MGT-7A within the required date and time, there is a penalty:

1. 100/day default till the filing is made.
2. There is no upper penal limit, and so delays can be extremely expensive.

Importance of Filing Form MGT-7A

It is important that the annual return be filed on time because of a number of reasons:

• Abides by the Companies Act, 2013.
• The company is transparent in its operations.
• Escapes fines and legal hassles.
• Establishes confidence with the stakeholders, investors, and authorities.

Conclusion

The implementation of Form MGT-7A is a great compliance relief to the Small Companies and OPCs. The government has done this by cutting down the paperwork and making the annual return less cumbersome, such that small businesses are now more focused on growing as opposed to compliance. Nonetheless, it is important to do this on time since failure to comply will lead to severe punishment.

In the case of the Small Companies and OPCs, it is necessary to learn about the Form MGT-7A filing, the due date, and the required documents so that the company may have proper corporate governance and prevent unwarranted legal actions.