Requirement – MGT – 9 Big Question?

Since previous some days many professionals are confused in respect of one question i.e. “Whether MGT-9 is required to be prepared for F.y. 2017-18 or not required to be prepared”.

As per CA, 2013 section 134, Companies was required to prepare MGT-9 extract of Annual Return and such MGT-9 was required to be filed with Directors Report.

However, this provision has been amended by Companies Amendment Act, 2017 w.e.f. 31.7.2018 i.e. as per notification dated 31^st July, 2018 provision in relation to MGT-9 has been removed from Section 134 and a new provision I added i.e. “the web address, if any, where [1]Annual Return referred to in sub-section (3) of section 92 has been placed”.

Therefore, According to Section 134 one can opine that MGT-9 is not required to prepared by any Company if Directors Report approved in Board Meeting on or after 31^st July, 2018.

Confusion: Section 134 is clear that extract of Annual Return has been removed from this section However; Section 92 is the reason behind confusions. Because, Section 92 read with rule 12 states that “The extract of the annual return to be attached with the Board’s Report shall be in Form No. MGT.9”

Now the actual question arise that Section 134 states that if Company having web address, it shall publish Annual Return on its website. Other side Section 92 rules 12 states about Extract of Annual Return.

Now Following Questions Arise:

1) Whether Companies are required to prepare MGT-9?

As per CA, 2013 section 134, Companies was required to prepare MGT-9 extract of Annual Return and such MGT-9 was required to file with Directors Report.

However, this provision has been amended by CAA, 2017 w.e.f. 31.7.2018 i.e. as per notification dated 31st July, 2017 provision in relation to MGT-9 has been removed from Section 134 and a new provision I added i.e. “the web address, if any, where annual return referred to in sub-section (3) of section 92 has been placed”.

First School of Thought:

Therefore, one can opine that MGT-9 is not required to prepare by any Company if Directors Report approved in Board Meeting on or after 31st July, 2018.

Second School of Thought:

Second view is that amendment proposed in Section 92 still not notified and section 92 Rule 12 states about Extract of Annual Return i.e. MGT-9 therefore, still preparation of MGT-9 is required.

2) Whether Companies are required to comply both Section 92 and Section 134?

As per second School of thought, Company is required to prepare MGT-9 because this is requirement under Section 92 read with rule 12.

However, above mentioned both the sections are in force as on date. Therefore, one can opine that after 31^st July, 2018 till the date of notification of amended section 92. Company has to comply with provisions of both Sections 92 and 134.  Company have to prepare MGT9 and required to publish annual return i.e. MGT-7 on website of Company, if any.

3) While complying Section 134, MGT-9 required being published on website of Company or Annual Return i.e. MGT-7 required publishing on website of Company?

As per requirement of Section 134, if Company having website in such case it is required to publish ANNUAL RETURN i.e. (MGT-7) on its website.

Therefore, it is very clear that while complying with the provision of Section 134 (Board Report) company have to publish the ANNUAL RETURN i.e. (MGT-7) on its website.

Practically, MGT-7 annual return prepared after Annual General Meeting and Board Reports prepare before General Meeting in such Case Companies can give link on its Directors’ Report that annual return of Company once prepare shall be publish on the given web address.

4) If Company doesn’t having website in such case whether MGT-9 required or not?

First thing as per Section 134 MGT-9 has been substitute by deletion of MGT-9 from Section.

Therefore, one can opine that in the case where a company doesn’t having website “it can mention in Directors Report that Company is not having website therefore no need publish annual return”.

5) If section 92 notified as suggested by Companies Amendment Act, 2017. Whether MGT-9 shall be part of Companies Act, 2013 or not?

Once section 92 as amended by Companies Amendment Act, 2017 notified then MGT-9 shall be fully removed from the Companies Act, 2013.

[1] First thing we should focus that word “Extract of Annual Return” has been replaced by “Annual Return”, therefore, MGT-9 has been replaced by MGT-7.