Ministry of Corporate Affairs has made amendments in the Companies (Management and Administration) Rules 2014. These rules will be called as the Companies (Management and Administration) Amendment Rules 2021. It is notified on March 5,2021.
This rule made amendment in the rule 11(1) of the existing Companies (Management and Administration) Rules 2014 whereby the existing clause will be replaced by the amended clause.
Original sub rule
Rule11(1) “Every company shall prepare its annual return in Form No. MGT.7.”
Amended sub rule
Rule 11(1) “Every company shall prepare its annual return in Form No. MGT.7 except One Person Company (OPC) and Small Company. One Person Company (OPC) and Small Company shall file annual return from the financial year 2020-2021 onwards in Form No. MGT-7A.”
On plain reading of the rule it is clear that Financial Year 2020-2021 onwards OPC and Small Companies will file their Annual Return in form MGT-7A.
This MGT 7A is abridged form of Annual Return for OPC and Small Companies.
All other companies will continue filing their annual return in Form MGT-7 as filed earlier.
Brief of MGT-7 A
There are various provisions under Companies Act,2013 which are not applicable on OPC and Small Companies. However, Form MGT 7 as used to submit earlier is for all types of Companies which includes even minor details for reporting which are not relevant for an OPC and Small Companies.
In form MGT 7A option will be asked whether the form is filed for OPC or Small Company.
After selection appropriate tables will be activated. Below given are some of the particulars which are not required for OPC in MGT 7 A:
- Details of AGM held;
- Particulars of associate companies including joint venture;
- Unclassified share capital and break of paid up capital;
- Details of share debenture transfers;
- Securities other than shares;
- Shareholding Pattern;
- Members Meeting;
- Board Meetings;
- Attendance for Directors.
To get more clarity we summaries here the meaning of One Person Company and Small Company
One Person Company
As per section 2(62) of Companies Act, 2013 One Person Company means a company which has only one person as a member.
Small Company
As per section 2(85) of Companies Act, 2013
“Small company” means a company, other than a public company:
- paid-up share capital of which does not exceed Rs. 50 Lakh or such higher amount as may be prescribed which shall not be more than Rs. 10 crore and
- turnover of which as per profit and loss account for the immediately preceding financial year does not exceed Rs. 2crore or such higher amount as may be prescribed which shall not be more than Rs. 100 crore:
Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any special Act;
Further Ministry of Corporate Affairs has issued the Companies (Specification of Definitions Details) Amendment Rules, 2021 which be effective from 1st day April, 2021 which has amended the definition of Small Company.
From 1st day April, 2021
“small company” means a company, other than a public company:
- paid-up share capital of which does not exceed Rs. 2 Crore or such higher amount as may be prescribed which shall not be more than Rs. 10 crore and
- turnover of which as per profit and loss account for the immediately preceding financial year does not exceed Rs. 20 crore or such higher amount as may be prescribed which shall not be more than Rs. 100 crore:
| Existing Limit | With effect from April 1,2021 |
| Paid-Up Share Capital: does not exceed Rs. 50 Lakh | Paid-Up Share Capital: does not exceed Rs. 2 crore |
| Turnover: does not exceed Rs. 2crore | Turnover: does not exceed Rs. 20 crore |
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