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. This move is aimed at reducing the compliance burden on the small companies and OPC’s and rectify some practical difficulties while filling the form. In this regard it is pertinent to note that the finance bill,2021 noted that small company definition has been amended in the finance bill, 2021. The amended definition is as follows:
Small company means a company other than the 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 few changes. The major differences between MGT-7 and MGT 7A is as follows:
1. 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.
2. The remuneration of details of KMP has also been omitted. *
3. The list of directors instead of mentioning in the form till now, has now been shifted to optional attachments.
*As the provisions related to KMP are not applicable for small and one-person companies, it seems to be logical that there is no need to mention them in the form.