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This article has been written by Aashna Soman, pursuing a Diploma in Companies Act, Corporate Governance and SEBI Regulations from LawSikho.


The article intends to explain the recent notifications issued by The Ministry of Corporate Affairs (“MCA”) on 5th March 2021 introducing certain amendments (“Amendment”) relating to filing of the abridged form of annual returns by one person companies and small companies. The amendment has been made to section 92 of the Companies Act, 2013 through the Companies (Amendment) Act, 2017 and the Companies (Management and Administration) Rules, 2014.

An annual return of a company is a comprehensive document in electronic form that is considered to be a public record of all financial details of the company of the preceding financial year, filed with the Registrar of Companies. The annual return of a company should be filed with the Registrar of Companies within 60 days from the conclusion of the Annual General Meeting, and a copy of the same should also be disclosed on the website of the company. 

Unlike the Financial Statements of the company which discloses the financial aspects of the company, the annual return consists of extensive non-financial and financial disclosures like the registered office of the company, business activities undertaken by the company, the shareholding pattern, its indebtedness, information about shareholders and key managerial persons of the company, and other vital disclosures related to the company’s management mandated in terms of section 92 of the Companies Act, 2013. 

An annual return of the company is the only document that compulsorily needs to be filed with the Registrar of Companies every year irrespective of the company’s performance in the previous year. The purpose of disclosing the annual return of the company year after year since incorporation of the company to dissolution is to ensure that there is transparency in the business operations of the company. 

The amendment in the Companies (Amendment) Act, 2017 and the Companies (Management and Administration) Rules, 2014 (“MGT Rules”) has provided for an abridged annual return for small companies and one-person companies, and further the details of which have been elaborated in detail below. 

Position of the law before the amendment

The amendments to the Companies Act and the MGT Rules came into effect on March 5th, 2021. Before this, there was no differentiation between annual returns filings for other companies and one-person companies/small companies. As per the MGT Rules, all companies including small companies and one-person companies were required to file their returns in form MGT-7. 

Another regulation that existed was with regards to companies annexing a copy of their annual return in form MGT-9 in the Board’s report, in cases where companies did not have their website. Earlier, all the companies were mandated to disclose their indebtedness in the annual report, every financial year. Indebtedness of the company includes any obligations or liabilities payable by the company to any third party during the financial year. The indebtedness certificate was to be signed by the Company Secretary or the CFO of the company. 

Amendments in annual returns fillings for one-person companies and small companies

The Government of India via the MCA has exercised the powers conferred by the sub-section (1) and (2) of section 469 of the companies act, 2013 and managed to amend section 92 of the companies act, 2013 and inserted an abridged format of annual returns in the MGT Rules by amending Rule 11(1) to simplify the procedure of filing annual returns for small companies and one-person companies by making it less cumbersome and more convenient. As per the new amendment, the central government prescribed an abridged form of annual returns for small companies and one-person companies by mandating them to file annual returns in a separate form, MGT 7-A whereas other companies will continue to file their returns in form MGT 7. This change has been implemented with immediate effect from the 5th of March, 2021. 

The Finance Minister presented the union budget on 1st February 2021, wherein there was a proposal to revise the definition of small companies by increasing the paid-up capital threshold of Rs 50 lakhs to Rs 2 crores and the turnover limit is to be enhanced from Rs 2 crores to Rs 20 crores. However, the small companies and OPCs, which filed their returns in the financial year 2020-2021, were the companies falling under the ambit of the previous definition. Form MGT 7A has been introduced as an abridged form of filing annual returns wherein the kind of details to be procured are directly related to the functioning of small companies and one-person companies. 

The form does not require details of holding and subsidiary companies unlike the previous form since small-scale companies do not stand a chance of having subsidiary companies and being holding companies. There are certain provisions in the form that do not apply to OPCs like the break-up of share capital and shareholding pattern of promoters, details of shares/debenture transfers, details of directors of companies and their attendance in the AGM, the date of the AGM, and the details of board meetings. Such details are not relevant to one-person companies since most of them are start-ups and keeping up with stringent compliances is an additional burden imposed on them. 

Another significant change in MGT-7A in comparison to MGT-7 is that the form does not mandate certification by a company secretary while filing returns for small companies and one-person companies. The form is to be filed with the Registrar of Companies along with the fees prescribed by the MCA. Further, the new certification has been inserted in the form which requires disclosures by small companies and OPCs wherein they have not issued invitations to the public to subscribe to their securities. By introducing form MGT-7A the government has initiated a step towards reducing compliances and simplifying business operations for the MSME sector. 

Removal of form MGT-9

The Form MGT-9 refers to an extract of the annual return (MGT-7) which was used to form a part of the Board’s report of the company. The origin of Form MGT-9 can be traced to section 92(3) and section 134(3)(a) of the Companies Act, 2013. Earlier, the provisions mentioned the requirement of an extract of the annual report (Form MGT-9) which had to be filed with the Director’s report irrespective of a company being private, public, OPC, or small company. Every company had to comply with the rules and annex the extract of the annual return in Form MGT-9. 

The MCA proposed an amendment in Section 134 (3)(a) vide notification dated 31st July 2018 by virtue of which the requirement of Form MGT-9 was done away with. As per the amendment, the companies could insert the web address of the annual report in the Board’s report. However, there were inconsistencies in the law as section 92 read along with Rule 12 of the MGT Rules remained un-amended and called for an extract of the annual report to be annexed with the Board’s report in Form MGT-9. This anomaly between the two provisions persisted among professionals as it led to them publishing the web link of the annual return on the company’s website as well as filing Form MGT-9. 

To settle the dispute between the provisions, the MCA with effect from 28th August 2020 amended section 92(3) of the Companies Act, 2013 and the MGT Rules. The amendment mandated every company to display a copy of the annual return on the website of the company, while the web-link of the same is to be disclosed in the Board’s report. The MCA by amending the MGT rules has given an option to the companies unable to place a copy of the website link to annex an extract of the annual return with the Board’s report. 

Other amendments

The MCA in the recent notification also omitted clauses from section 92 (1) of the Companies Act. The amendment omitted the requirement of furnishing details of indebtedness of the company in the annual report. There was no justification provided for the omission, however, the amendment does not impact the filings of the company as details of indebtedness are mentioned in the balance sheet which is published on the company’s website. There has also been a change in terms of details to be furnished of Foreign Institutional Investors in the company. The requirement of disclosing details indicating names, addresses, countries of incorporation, registration and, percentage of their shareholding has been omitted by this amendment. 


Every company in India is mandated to file an annual return at the end of every financial year with the Registrar of Companies. The present amendment brings clarity and resolves the uncertainty surrounding the filing of annual returns. The government has made a strong attempt at reducing lengthy documentation for small companies and one-person companies by inserting Form MGT-7A. The benefits of amendments concerning the removal of Form MGT-9 and the introduction of Form MGT-7A can be seen as a welcome move towards the central government’s goal to reduce compliances and heavy filings for companies and improve the ease of doing business in the country. Reduction in compliances and documentation will help businesses remain focused on their core operations which will, in turn, enhance their growth. 



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