As we all know, The annual return is an important document to be filed by all companies with the Company Registrar [ROC]. Accordingly, the annual return shall be prepared as prescribed.
One such important form is Form MGT-7. It contains essential information such as information on registered offices, the principal business activities, the debenture of stocks and other securities and shareholder patterns, details of promoter directors and key managers, board of directors, general committees, etc.
In this article, we will read about the vital update by the government, i.e., ROC Annual Return to be published on Company Website.
Know about MGT-7
The MGT 7 form is an online form for all enterprises. It is assigned to submit their yearly return data by the Ministry of Corporate Affairs. The Companies Registrar utilizes the electronic or online way to maintain this e-form based on an accuracy declaration provided by the Company. It doesn’t matter if the firm is public or private. Every year every registered Company in India must submit this e-form for its annual return.
What if MCA Form MGT 7 is not filed?
In case of failure to file Form MGT07, a penalty of INR 100 per day is imposed. Thus companies should file MGT-7 along with annual returns to avoid hefty fines.
Latest Amendments: ROC Annual Return to be published on Company Website
The Corporate Affairs Ministry has revised, with effect from 28 August 2020, Section 92 of the Company Act 2013. The amendment states The following:
‘Every firm should put a copy of the annual return on the company’s websites if any. Furthermore, companies shall publish web links of yearly returns in the Boards Report.’
Let’s look at amendments in detail.
- The company should post its annual report in the form of MGT 7 on the website, and companies should include its link to the website in the boards’ reports under section 134.
- Previously, the annual return extract, ie. MGT 9 was part of the report of the Boards. However, it now says that MGT 7 is to be released annually on the website if any. Therefore, it is now possible that MGT 9 does not have to be submitted. Like it was part of the Board of Directors’ report anymore.
- It also explained that if the corporations do not have a website, then they are not required to publish annual return details in the board’s report.
- In the case that the company has a website, an annual return must be produced as MGT 7 prior to the preparation and publication of the Board’s reports on the business’s website, as well as an internet link which is included in the Board’s report and circulated between members of the business.
Reduction in Annual Return for Small companies and One person Companies
For the micro-businesses and one-person firms from the financial year 2020-21, the Ministry of Corporate Affairs proposed abbreviated yearly returns. The abbreviated yearly return is MGT-7A. Let’s look at the critical changes in abridged annual returns as compared to an annually existing return.
- No need to mention Indebtedness details.
- The membership of the Management Board is not necessary for disclosure.
- Details of the managers and the critical managerial staff and the changes in management and KMP over the financial year do not need to be communicated.
- Lastly, certification from practicing company secretaries is not required.
It is evident that the Ministry of Corporate Affairs attempts to facilitate the process for the posting of annual returns.
Moreover, it is welcomed by the MCA to publish a short annual report for small firms and One person companies, instead of a complete annual report as mandated by the Act.
Therefore, the businesses should also file GST Returns on time to avail of the GST Benefits.
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