WHAT IS MGT -7?
INTRODUCTION
MGT-7 is a form used by companies in India to file their annual return with the Registrar of Companies (ROC). It is an annual filing that must be completed within 30 days of the end of the company’s financial year. The form includes information on the company’s board of directors, shareholders, and share capital. It also includes a directors’ report and an auditors’ report.
The due date for filing MGT-7 for the financial year 2022-23 is February 28, 2024. If the form is not filed on time, the company may be liable for a penalty.
Here are some of the details that are required to be filed in MGT-7:
- Name of the company
- Registration number
- Financial year
- Directors’ report
- Auditors’ report
- List of directors
- Details of shareholders
- Share capital
- Statement of changes in share capital
- Notes to accounts
The MGT-7 form can be filed online through the Ministry of Corporate Affairs (MCA) website. The form can also be filed offline at the ROC office.
ADVANTAGES
- Compliance with legal requirements: MGT-7 is a mandatory filing for all companies registered in India. By filing MGT-7, companies can ensure that they are in compliance with the Companies Act, 2013.
- Transparency: MGT-7 provides a snapshot of a company’s board of directors, shareholders, and share capital. This information is important for shareholders, creditors, and other stakeholders to make informed decisions about the company.
- Improved corporate governance: MGT-7 requires companies to have a board of directors and to maintain a register of shareholders. This helps to ensure that the company is managed in a responsible and transparent manner.
- Risk management: MGT-7 can help companies to identify and manage risks. By understanding the composition of their board of directors and their shareholder base, companies can take steps to mitigate risks and protect their assets.
- Access to capital: MGT-7 can help companies to access capital from investors. By providing investors with a snapshot of the company’s board of directors and shareholder base, MGT-7 can help to build trust and confidence.
DISADVANTAGE
- Cost: Filing MGT-7 can be a costly exercise, especially for small and medium-sized enterprises (SMEs). The cost of preparing the form, having it certified, and filing it with the ROC can be significant.
- Time commitment: Filing MGT-7 can be a time-consuming process, especially for companies with complex structures. The directors and management of the company will need to spend time gathering the necessary information and preparing the form.
- Complexity: MGT-7 is a complex form, and it can be difficult to understand and complete, especially for companies that are not familiar with corporate law. There is a risk of making mistakes, which could lead to penalties from the ROC.
- Non-compliance: If MGT-7 is not filed on time or in a complete and accurate manner, the company may be liable for penalties from the ROC. These penalties can be significant, and they could damage the company’s reputation.
CONCLUSION
MGT-7 is a mandatory filing for all companies registered in India. It is an annual filing that must be completed within 30 days of the end of the company’s financial year. The form includes information on the company’s board of directors, shareholders, and share capital. It also includes a directors’ report and an auditors’ report. The due date for filing MGT-7 for the financial year 2022-23 is February 28, 2024. If the form is not filed on time, the company may be liable for a penalty.
