Recently the Ministry of Corporate Affairs has notified a separate form for small companies and one-person companies (OPC) under section 92 read with sub-rule (1) rule 11 of the Companies Management and Administration rules.
In this regard, it is pertinent to note that the Finance Bill, 2021 has amended the definition of a Small Company:
The amended definition is as follows for the MGT 7a form:
Small company means a company other than a public company —
(i) paid-up share capital of which does not exceed two crores rupees or such higher amount as may be prescribed which shall not be more than ten crore rupees and
(ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed twenty crore rupees or such higher amount as may be prescribed which shall not be more than one hundred crore rupees.
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.
The entire format of the form MGT 7A has been kept intact, barring a few changes.
The major differences between MGT-7 and MGT 7A are as follows:
- Details of directors and KMPi.e., the composition of the board of directors, details of directors and KMP has been omitted in the new form.
- The remuneration of details of KMP has also been omitted. *
- The list of directors instead of mentioning in the form till now has now been shifted to optional attachments.
This move is aimed at reducing the compliance burden on the small companies and OPC’s and rectifying some practical difficulties while filling out the form.