MGT-8: Why Companies Need a Certification of Annual Return
- adityas41
- Jan 18
- 7 min read
As a company director or compliance officer in India, you're likely familiar with the various forms and filings required under the Companies Act, 2013. One such form that often raises questions is MGT-8, the certification of annual return. What exactly is this form, and why do companies need to file it? In this post, we'll dive deep into MGT-8, understand its purpose, and explore the consequences of non-compliance.
Understanding Annual Returns
Before we delve into MGT-8, let's quickly recap what an annual return is. An annual return, filed through Form MGT-7, is a comprehensive document that provides a snapshot of a company's key information for a particular financial year. It includes details like the company's registered office, principal business activities, shareholding pattern, indebtedness, directors' particulars, and more.
Filing an annual return is a mandatory requirement under the Companies Act, 2013. It promotes transparency, helps stakeholders make informed decisions, and serves as a historical record of a company's information.
What is MGT-8?
MGT-8 is a form prescribed under the Companies Act, 2013 for the certification of an annual return. It's a document that certifies the accuracy and completeness of the information provided in the annual return (MGT-7).
Think of MGT-8 as a stamp of approval on your annual return. It's a way of saying, "We've double-checked all the information in MGT-7, and it's true and correct to the best of our knowledge."
The certification in MGT-8 needs to be provided by a company secretary in whole-time practice. If a company doesn't have a full-time company secretary, it can engage a practicing company secretary for this purpose.
Why is MGT-8 Required?
You might be wondering, if a company has already filed its annual return through MGT-7, why is there a need for a separate certification in MGT-8? Here's why:
Ensuring Accuracy: MGT-8 adds an extra layer of scrutiny to the information provided in the annual return. The certifying company secretary is required to verify the details in MGT-7 against the company's records and ensure that they are accurate and complete. This helps prevent any inadvertent errors or omissions in the annual return.
Detecting Discrepancies: During the certification process, the company secretary may come across discrepancies between the information in MGT-7 and the company's actual records. MGT-8 provides an opportunity to detect and rectify these discrepancies before the annual return is filed with the Registrar of Companies (ROC).
Professional Oversight: The requirement of certification by a company secretary in whole-time practice brings in professional oversight to the annual return filing process. Company secretaries are qualified professionals who are well-versed in corporate laws and compliance requirements. Their involvement helps ensure that the annual return is prepared in accordance with the relevant provisions of the Companies Act.
Legal Compliance: Filing MGT-8 is a mandatory requirement under the Companies Act, 2013. By obtaining the certification, a company demonstrates its compliance with this legal obligation and avoids any penalties or legal action for non-compliance.
In essence, MGT-8 serves as a quality check on the annual return, helping ensure the accuracy, completeness, and reliability of the information provided to the ROC and the public at large.
Who Needs to File MGT-8?
Most companies incorporated under the Companies Act, 2013 are required to file MGT-8 along with their annual return (MGT-7). This includes:
Public limited companies
Private limited companies
One Person Companies (OPCs)
Small companies
Dormant companies
Foreign companies with Indian operations
However, there are a few exceptions:
Section 8 companies (non-profit companies) are not required to file MGT-8.
Limited Liability Partnerships (LLPs) are not required to file MGT-8 as they are governed by a separate law.
It's important to note that even if a company has not carried out any business during the financial year, it still needs to file MGT-8 along with MGT-7.
When to File MGT-8?
MGT-8 needs to be filed along with the annual return (MGT-7). The due date for filing MGT-7 depends on the date of the company's Annual General Meeting (AGM):
If the AGM is held within the statutory time limit (6 months from the end of the financial year), MGT-7 and MGT-8 need to be filed within 60 days from the date of the AGM.
If the AGM is not held within the statutory time limit, MGT-7 and MGT-8 need to be filed within 60 days from the last date on which the AGM should have been held.
For example, if a company's financial year ends on March 31, 2023, and it holds its AGM on September 15, 2023, it needs to file MGT-7 and MGT-8 by November 14, 2023 (60 days from the AGM date).
How to File MGT-8?
Filing MGT-8 is an online process that needs to be done through the MCA portal. Here's a step-by-step guide:
Step 1: Obtain Certification from a Company Secretary
The first step is to engage a company secretary in whole-time practice to certify the annual return. The company secretary will verify the information in MGT-7 against the company's records and provide the necessary certification in MGT-8.
Step 2: Access the MGT-8 Form
Log in to the MCA portal using the company's credentials and navigate to the "Company Forms Download" page. Download the latest version of the MGT-8 form (usually in PDF format).
Step 3: Fill Out the MGT-8 Form
Open the downloaded MGT-8 form and fill in the required information. The form requires details like the company's name, registered office address, CIN (Corporate Identity Number), financial year, and the date of the AGM.
The certifying company secretary needs to provide their name, membership number, and certificate of practice number. They also need to sign and date the form.
Step 4: Attach MGT-8 to MGT-7
Once MGT-8 is duly filled and signed by the company secretary, it needs to be attached to the annual return (MGT-7) before filing.
Step 5: File MGT-7 along with MGT-8
Log in to the MCA portal and navigate to the "Company Forms Upload" page. Select "Form MGT-7" and upload the filled-out MGT-7 form along with the MGT-8 certification and other necessary attachments.
After uploading, submit the form and make the necessary payment. The filing fee for MGT-7 (including MGT-8) varies based on the company's authorized share capital.
Once the ROC processes and approves the filing, the annual return along with the MGT-8 certification will be available for public viewing on the MCA portal.
Consequences of Non-Filing or Delayed Filing
Failing to file MGT-8 along with the annual return or filing it late can attract serious consequences for the company and its directors:
Late Filing Fee: A late filing fee of Rs. 100 per day of delay (up to a maximum of Rs. 5,00,000) is applicable for MGT-7 (including MGT-8). This fee can add up quickly if the delay is prolonged.
Disqualification of Directors: If a company fails to file its annual return (including MGT-8) for three consecutive years, its directors can be disqualified from being appointed as directors in any other company for a period of five years.
Prosecution: In extreme cases of non-compliance, the ROC can initiate prosecution proceedings against the company and its officers, which can result in fines and imprisonment.
Reputational Damage: Non-filing or delayed filing of annual returns and certifications can also damage a company's reputation and credibility among stakeholders. It may raise red flags for investors, lenders, and regulators.
Therefore, it's crucial for companies to prioritize timely and accurate filing of MGT-8 along with MGT-7 to avoid these consequences and maintain good corporate governance.
How Fiscal Flow Can Help
Filing MGT-8 and ensuring compliance with annual return requirements can be a complex and time-consuming process, especially for companies with limited resources or expertise. That's where Fiscal Flow comes in. As a leading provider of corporate compliance services in India, we can help you navigate the MGT-8 filing process with ease and accuracy.
Here's how we can assist:
Certification Assistance: Our team includes qualified company secretaries who can provide the necessary certification for MGT-8. We'll verify the information in MGT-7 against your company's records and ensure that the certification is accurate and complete.
Form Filling and Filing: We'll take care of filling out the MGT-8 form and attaching it to MGT-7. Our experts will ensure that all the details are correctly provided and the forms are filed within the due dates.
Compliance Tracking: We'll keep track of the filing status and follow up with the ROC in case of any queries or delays. We'll also provide you with the acknowledgment receipt and the filed forms for your records.
Annual Compliance Package: In addition to MGT-8, we offer a comprehensive annual compliance package that covers all the necessary filings and certifications under the Companies Act. This includes MGT-7, AOC-4 (financial statements), Board's report, and more.
With Fiscal Flow as your compliance partner, you can focus on running your business while we take care of the compliance hassles. Our goal is to simplify compliance for you and give you peace of mind.
Conclusion
MGT-8, the certification of annual return, is a crucial compliance requirement for companies in India. It serves as a quality check on the information provided in the annual return (MGT-7), helping ensure accuracy, completeness, and reliability.
Filing MGT-8 along with MGT-7 is a mandatory obligation under the Companies Act, 2013. Failing to do so can attract serious consequences, including monetary penalties, legal action, and reputational damage.
To navigate the complexities of MGT-8 and other annual compliance requirements, it's advisable to seek the assistance of a trusted compliance partner like Fiscal Flow. Our expert team of company secretaries and compliance professionals can guide you through the filing process and ensure that your company remains compliant with all the relevant laws and regulations.
Remember, compliance is not just a box-ticking exercise but a reflection of a company's commitment to good governance and transparency. By prioritizing compliance and staying on top of your filing obligations, you can build trust with your stakeholders, avoid legal pitfalls, and focus on growing your business.
If you have any further questions about MGT-8 or need assistance with your annual compliance needs, feel free to reach out to us at Fiscal Flow. We're here to help you every step of the way and make compliance a breeze.
