Importance of MGT-7 / MGT-7A in company law compliance
Introduction
Many companies complete AOC-4 filing but ignore or delay MGT-7 / MGT-7A, assuming it is just a summary form.
In reality, MGT-7 and MGT-7A are core compliance documents under company law.
Non-filing or late filing of these forms leads to penalties, director disqualification, and serious compliance gaps.
This blog explains why MGT-7 / MGT-7A is important and how it impacts company law compliance.
What Is MGT-7 and MGT-7A
MGT-7 and MGT-7A are annual return forms filed with the Registrar of Companies under the Companies Act, 2013.
MGT-7 is filed by companies other than OPC
MGT-7A is filed by One Person Companies (OPC)
These forms disclose:
Shareholding pattern
Details of directors and KMP
Registered office information
Company compliance status
Why MGT-7 / MGT-7A Filing Is Mandatory
MGT-7 / MGT-7A must be filed within 60 days of the AGM (or prescribed date for OPC).
Even if:
There is no business
There is no income
The company is inactive
Annual return filing is still compulsory.
What this really means is:
Without MGT-7, company records remain legally incomplete.
Importance of MGT-7 / MGT-7A in Compliance
1. Confirms Legal Status of Company
MGT-7 updates the government about:
Who owns the company
Who manages the company
Whether statutory compliances are met
This ensures transparency and legality.
2. Essential for Director Eligibility
Director records are validated through MGT-7.
Non-filing for consecutive years may result in:
Director disqualification
DIN flagging on MCA portal
Restrictions on future appointments
Directors are personally affected.
3. Required for Completing Annual ROC Filing
Annual ROC compliance is incomplete without:
AOC-4 (financials)
MGT-7 / MGT-7A (annual return)
Missing MGT-7 means the company remains non-compliant, even if accounts are filed.
4. Critical for Bank Loans and Due Diligence
Banks, investors, and regulators check:
MGT-7 filings
Shareholding disclosures
Director history
Non-filing raises immediate red flags during funding or loan approval.
Consequences of Non-Filing of MGT-7 / MGT-7A
1. Heavy Late Fees
Late fees are charged per day, with substantial accumulation over time.
Delays of multiple years can result in:
Significant financial burden
Difficulty in regularising compliance
2. Director Disqualification
If annual returns are not filed for three consecutive financial years, directors may be disqualified under company law.
This applies across all companies where the person is a director.
3. ROC Notices and Legal Action
ROC may issue:
Show cause notices
Penalty orders
Prosecution in extreme cases
Directors must personally respond.
Common Mistakes Companies Make
Filing AOC-4 but skipping MGT-7
Assuming no business means no filing
Missing AGM timelines
Not tracking due dates
These mistakes are avoidable.
How to Stay Compliant
Conduct AGM on time
File AOC-4 first
File MGT-7 / MGT-7A within due date
Verify filing status on MCA portal
Compliance discipline matters.
Conclusion
MGT-7 / MGT-7A is not a formality.
It is a legal declaration of company ownership and management.
Timely filing:
Protects directors
Keeps company active
Avoids penalties and disqualification
Ignoring it leads to serious compliance risks.
Call to Action
If your company has missed MGT-7 or MGT-7A filing for any year, corrective action should be taken immediately to avoid penalties and director disqualification.
Written by:
Abhishek Gupta
Chartered Accountant
Office No. 19, Sagar Building, 4th Floor, Plot-327,
Narshi Natha Street, Masjid Bunder (West),
Mumbai – 400009
📞9324776120
🌐 www.consultguruji.com