Form MGT-6 under the Companies Act, 2013

The Companies Act of 2013 wants companies to be transparent. This means companies should be open about who owns them. Sometimes a person’s name is listed as the owner of a company. The company actually belongs to someone else. The Registrar of Companies needs to know about this. So, companies have to fill out Form MGT-6 to tell them.

Form MGT-6 is an important compliance that companies have to follow. A lot of companies forget to do it. If they do not fill out the form on time they might have to pay a fine.

This article will tell you everything you need to know about Form MGT-6. It will explain when you need to fill out the form, what documents you need how to fill out the form and frequently asked questions about Form MGT-6.

What is Form MGT-6?

Form MGT-6 is a return filed by a company with the Registrar of Companies (ROC) whenever it receives a declaration regarding beneficial interest in shares under Section 89 of the Companies Act, 2013.

The form informs the ROC that the person whose name appears in the Register of Members is different from the person who actually enjoys the beneficial ownership of those shares.

Legal Provisions Governing MGT-6

The filing of Form MGT-6 is governed by:

Section 89(6) of the Companies Act, 2013
Rule 9(3) of the Companies (Management and Administration) Rules, 2014

Section 89 requires:

the registered owner to declare that he is not the beneficial owner;
the beneficial owner to declare his beneficial interest; and
the company to file Form MGT-6 with the ROC within the prescribed time after receiving such declarations.

What is Beneficial Interest in Shares?

A beneficial owner is the person who actually enjoys the ownership rights attached to shares, even though the shares are registered in someone else’s name.

The registered owner merely holds the shares in his name without enjoying the actual benefits.

Rights of a Beneficial Owner

Right to receive dividends
Right to economic benefits
Right to sale proceeds
Any other beneficial rights arising from ownership

When is Form MGT-6 Required?

MGT-6 is required whenever:

Shares are held in the name of one person but beneficial ownership belongs to another person.
There is any change in beneficial ownership.

Fresh declarations under Section 89 are received by the company.

Who is Required to File MGT-6?

The responsibility to file MGT-6 lies with the company, not the shareholders.

Before filing MGT-6:

Registered Owner submits declaration to the company.
Beneficial Owner submits declaration to the company.
The company records the declaration in the Register of Members.
Thereafter, the company files Form MGT-6 with the ROC.

Forms Related to MGT-6

Form	Purpose	Filed By
MGT-4	Declaration by Registered Owner	Registered Owner
MGT-5	Declaration by Beneficial Owner	Beneficial Owner
MGT-6	Return to ROC	Company

Timeline for Filing

The company must file Form MGT-6 within 30 days from the date of receipt of the declaration from the registered owner/beneficial owner.

Information Required for Filing MGT-6

The following details are generally required for filing MGT-6:

Company Details

CIN
Company Name
Registered Office Address
Email ID

Share Details

Number of shares
Distinctive numbers
Class and type of shares
Face value

Paid-up value

Registered Owner Details

Name
Address
PAN/Passport/Registration Number
Nationality
Date of entry in Register of Members
Date of declaration
Date of receipt of declaration

Beneficial Owner Details

Name
Address
PAN/Passport/Registration Number
Nationality
Date of acquiring beneficial interest
Nature of beneficial interest

Attachments Required

The following documents are generally attached:

Declaration received under Section 89
Instrument/document creating beneficial interest (if applicable)
Board Resolution or Authorisation (where required)
Optional supporting documents, if any.

Step-by-Step Procedure to File MGT-6

The procedure to file MGT-6 are enumerated below:

Step 1: Obtain Declaration

Receive declarations from the registered owner and beneficial owner under Section 89.

Step 2: Verify Documents

Verify:

Shareholding details
PAN details
Beneficial ownership particulars
Supporting documents

Step 3: Update Register of Members

Record the declaration in the Register of Members before filing MGT-6.

Step 4: Prepare Form MGT-6

Enter:

Company details
Share particulars
Registered owner details
Beneficial owner details
Nature of beneficial interest

Step 5: Attach Supporting Documents

Upload all mandatory attachments.

Step 6: Digital Signature

The form should be digitally signed by an authorised director, manager, CEO, CFO or Company Secretary, as applicable, in accordance with the MCA filing requirements.

Step 7: Upload on MCA Portal

Upload the eForm on the MCA portal, pay the prescribed filing fee, and preserve the SRN and acknowledgement for future reference.

MCA Filing Fees

The filing fee depends upon the company’s authorised share capital as prescribed under the Companies (Registration Offices and Fees) Rules.

Additional fees become applicable if the form is filed after the prescribed due date.

Consequences of Non-Compliance

Failure to comply with Section 89 and Form MGT-6 requirements may result in:

Penalty under the Companies Act, 2013.
Non-disclosure of actual beneficial ownership.
Compliance issues during due diligence, mergers, investments and audits.
ROC observations during inspection or scrutiny.

Practical Example

Example 1

Mr. A holds 5,000 equity shares in his name.

However, the shares actually belong to Mr. B.

Mr. A is the Registered Owner.
Mr. B is the Beneficial Owner.
Both submit declarations to the company.
The company files Form MGT-6 within 30 days.

Common Mistakes to Avoid

Missing the 30-day filing deadline.
Incorrect share particulars.
Wrong dates of declaration.
Failure to update the Register of Members.
Missing supporting documents.
Filing without obtaining declarations under Section 89.
Incorrect details of beneficial ownership.

Conclusion

Form MGT-6 is an important form that helps make shareholding clear. It makes sure the Registrar of Companies knows when the person who owns shares and the person who really has control of shares are not the same. Companies must make a plan to quickly get declarations under Section 89. They must update their records and file Form MGT-6 on time.

This helps avoid fines and makes sure companies are run properly. Filing Form MGT-6 on time also helps companies follow the rules better. The ROC must be informed through Form MGT-6 whenever the registered owner and the beneficial owner of shares are different.

Companies should establish a process to promptly obtain declarations under Section 89 and update their registers.They should file Form MGT-6 within the timeline to avoid any issues.

Frequently Asked Questions (FAQs)

1. What is Form MGT-6?

It is a return filed by a company with the ROC after receiving declarations relating to beneficial ownership of shares under Section 89 of the Companies Act, 2013.

2. Which section governs Form MGT-6?

Section 89(6) of the Companies Act, 2013 read with Rule 9(3) of the Companies (Management and Administration) Rules, 2014.

3. Who files Form MGT-6?

The company files Form MGT-6 with the ROC.

4. What is the due date for filing MGT-6?

Within 30 days from the date of receipt of the declaration by the company.

5. Is MGT-6 mandatory for private companies?

Yes. The requirement applies to every company whenever Section 89 becomes applicable.

6. Can MGT-6 be filed after the due date?

Yes, but additional filing fees may apply and the company may be exposed to penalties for non-compliance.

7. Is MGT-6 required when there is no beneficial owner?

No. It is required only where the registered owner and beneficial owner are different.

8. Is Board approval mandatory before filing MGT-6?

The Act does not specifically mandate a Board Resolution for filing MGT-6, although companies may authorise an officer or director as part of their internal governance process.

9. Is MGT-6 required for nominee shareholding in a wholly owned subsidiary?

Generally, yes, where the nominee is the registered owner and the holding company is the beneficial owner, subject to the declarations under Section 89 being applicable.

10. Which documents should be preserved after filing?