How to fIle Form MGT 7 in Transission of Small company as Holding or Subsidiary Company During Reporting Financial Year? Know more
MCA in its Twitter(X) account has notified the steps to follow while filing Form MGT-7 if a Small Company has become a Holding or Subsidiary Company during the reporting financial year.
When a small firm becomes a holding or subsidiary company during a reporting fiscal year, the classification change will impact the annual return filing obligations for Form MGT-7 or MGT-7A. The Companies Act, 2013's Section 2(85) defines a "small company" as one that is not a public company, has paid-up share capital of no more than ₹2 crore (or a higher prescribed amount,...
When a small firm becomes a holding or subsidiary company during a reporting fiscal year, the classification change will impact the annual return filing obligations for Form MGT-7 or MGT-7A.
The Companies Act, 2013's Section 2(85) defines a "small company" as one that is not a public company, has paid-up share capital of no more than ₹2 crore (or a higher prescribed amount, not exceeding ₹10 crore), and has turnover of no more than ₹20 crore (or a higher prescribed amount, not exceeding ₹100 crore) as shown in the most recent profit and loss account. This implies that a small business no longer qualifies as a "small company" if it becomes a holding or subsidiary.
Form MGT-7A, a simplified version for OPCs and small businesses, is typically used for filing the company's annual return if it was a "small company" prior to the status change during the fiscal year.
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The business is no longer considered a small business once it becomes a holding or subsidiary firm. Therefore, it will typically be required to file its annual return in Form MGT-7, the more extensive form applicable to all other corporations, for the fiscal year in which this transition happens (and following years, provided it maintains holding/subsidiary status).
Form MGT-7 requires comprehensive details about the company's structure and relationships. When a small company becomes a holding or subsidiary, you'll need to accurately reflect this change in the relevant sections of Form MGT-7.
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MCA in its Twitter(X) account has notified the steps to follow while filing Form MGT-7 if a Small Company has become a Holding or Subsidiary Company during the reporting financial year.
- First, file Form No. AOC-4 with the updated details.
- Once the updated information is reflected in the MCA records, your company’s classification will be revised automatically.
- Thereafter, you will be able to proceed smoothly with the filing of Form No. MGT-7.
MCA in its Twitter(X) account has notified the steps to follow while filing Form MGT-7 if a Small Company has become a Holding or Subsidiary Company during the reporting financial year.
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