Management & Administration
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Contents
In 30 seconds
- Chapter VII (Sections 88–122 plus the Companies (Management and Administration) Rules, 2014) runs from statutory registers all the way to meeting minutes.
- Registers block: members (MGT-1) and security holders (MGT-2) → beneficial interest (Sec 89, MGT-4/5/6) → SBO (Sec 90, BEN-1 to BEN-4) → closure (Sec 91: 45/30/7).
- Annual return MGT-7/7A reaches the Registrar within 60 days of the AGM; MGT-8 certification applies to listed / ₹10 cr capital / ₹50 cr turnover companies.
- Every meeting follows one golden thread: Notice → Explanatory Statement → Quorum → Chairman → Proxy → Vote → Resolution → Minutes.
- OPC carve-out: Sections 98 and 100–111 do not apply — a member's communicated resolution entered in the minutes book is a deemed meeting.
Companies Act, 2013 (Chapter VII, Sections 88–122) read with the Companies (Management and Administration) Rules, 2014, as amended, per the May 2026 syllabus.
How the chapter fits together
Chapter VII is a procedure chapter: it tells a company what records to keep, what to file every year, and how to hold and document a valid meeting. Learn it as five blocks in sequence:
- Registers (88–91) — members and security holders → beneficial interest (89) → SBO (90) → power to close (91) →
- Annual return (92, 94, 95) — MGT-7/7A, MGT-8 certification, place and inspection, evidentiary value →
- Meeting types (96–100, 121) — AGM, Tribunal-called meetings, penalty, EGM, report on AGM →
- Meeting machinery (101–117) — notice → explanatory statement → quorum → chairman → proxy → voting (106–110) → representation (111–113) → resolutions (114–117) →
- Minutes (118–120) and the OPC carve-out (122).
The golden thread of every meeting — Notice → Explanatory Statement → Quorum → Chairman → Proxy → Vote → Resolution → Minutes — is the chronological life-cycle every exam question walks along.
Registers, beneficial ownership and annual return — Sections 88–95
Section 88 requires a register of members from the date of registration in Form MGT-1 (entries within 7 days of Board/committee approval, Rule 5(1)), and a separate register for each type of security for debenture holders and other security holders in MGT-2. An index of names is needed unless the company has under 50 members. Under Section 88(3), the register and index kept by a depository are deemed the corresponding register and index. Listed-company promoters’ pledge/charge/lien particulars are entered within 15 days (Rule 5(7)/(8)). A foreign register — part of the principal register kept outside India, if the Articles authorise it — needs notice in MGT-3 within 30 days, entry copies to the registered office within 15 days, and transactions cannot be dual-registered.
Beneficial interest [Sec 89(10)]
The right to exercise rights attached to shares or to receive dividend — directly or indirectly, alone or with others. Trap: it is not necessarily sole entitlement. The registered owner (name on the register, no beneficial interest) declares in MGT-4; the beneficial owner in MGT-5; the company returns MGT-6 — each within 30 days.
Significant Beneficial Owner (SBO) [Sec 90(1) + Rule 2(1)(h)]
Under the Act: an individual holding ≥25% beneficial interest, or significant influence/control. The operational trigger under Rule 2(1)(h) is ≥10% indirect (or indirect + direct) holding — a direct-only holder, however large the percentage, is NOT an SBO. Significant influence = power to participate in financial/operating decisions (a lesser standard than control); majority stake = strictly >50%.
The forms map — memorise it as a grid:
| Form | Purpose | Time limit |
|---|---|---|
| MGT-1 | Register of members (from date of registration) | Entries within 7 days of approval (Rule 5(1)) |
| MGT-2 | Register of debenture holders / other security holders — separate per type | — |
| MGT-3 | Foreign register notice (Articles must authorise) | 30 days; entry copies to RO in 15 days |
| MGT-4 | Registered owner’s declaration | 30 days |
| MGT-5 | Beneficial owner’s declaration | 30 days |
| MGT-6 | Company’s return of beneficial interest | 30 days — Sec 89(6) |
| MGT-7 / 7A | Annual return | 60 days from AGM — Sec 92(4) |
| MGT-8 | PCS certification of annual return (listed · ₹10 cr capital · ₹50 cr turnover) | — |
| MGT-11 | Proxy form | Deposit ≥48 hours before meeting |
| MGT-13 | Scrutinizer’s poll report | 7 days — Rule 21(2) |
| MGT-14 | Filing of resolutions/agreements (list in Sec 117(3)) | 30 days |
| MGT-15 | Report on AGM (listed public companies) | 30 days |
| BEN-1 | SBO’s declaration | 90 days from 8-2-2019 commencement; changes in 30 days (Rule 3(2)) |
| BEN-2 | Company’s return of SBOs | 30 days (Rule 4) |
| BEN-3 | Company’s register of SBOs | — |
| BEN-4 | Company’s notice seeking SBO information | Tribunal application within 15 days of non-compliance — Sec 90(7) |
SBO enforcement chain: company issues BEN-4 → non-compliance → company applies to the Tribunal within 15 days (90(7)) → Tribunal orders within 60 days (90(8)) → the affected person has 1 year to apply for relaxation/lifting of restrictions, failing which the shares go to the IEPF (90(9)). Wilfully false SBO information invites Section 447 fraud punishment (90(12)).
Exemptions to keep straight: Section 89 does not bite trusts for Mutual Funds, Venture Capital Funds and SEBI-approved funds (Rule 9); Government companies are exempt from Sections 89 and 90 if there is no default in filing financial statements/annual returns; SBO rules do not apply to the IEPF Authority, the holding reporting company, the Government, and SEBI/RBI/IRDAI/PFRDA-regulated investment vehicles (Rule 8).
Closure of register (91): maximum 45 days per year, not more than 30 days at a time, with 7 days’ previous notice — the “45/30/7” rule. Private companies are exempt from the newspaper advertisement (Rule 10) — only the 7 days’ notice to members applies.
Annual return (92): filed in MGT-7/7A within 60 days of the AGM, signed by a director + CS (OPC/small company/start-up private company: CS, or a director if there is no CS). A PCS certificate in MGT-8 is needed for a listed company or one with paid-up capital of ₹10 crore / turnover of ₹50 crore. Place and inspection (94): registers stay at the registered office, but may be kept elsewhere in India where more than 1/10th of members reside, by special resolution; inspection fee up to ₹50, extracts up to ₹10 per page, copies within 7 days; address, e-mail, UIN and PAN are excluded from inspection (Rule 14). Section 95 makes the registers prima facie evidence.
Meetings: AGM, Tribunal-called meetings and EGM — Sections 96–100
| AGM rule | Limit |
|---|---|
| First AGM | Within 9 months of FY close — NO Registrar extension, ever |
| Subsequent AGMs | Within 6 months of FY close |
| Gap between two AGMs | ≤15 months |
| Registrar extension | Up to 3 months (never for the first AGM) |
| Hours and day | 9 am – 6 pm; never on a National Holiday |
| Place | RO or same city/town; unlisted company: anywhere in India with written consent of ALL members |
| Exemptions | OPC exempt entirely; Section 8 and Government company modifications |
On default, the Tribunal can call the AGM on a member’s application (Sec 97) — and even one member present is a valid meeting if so directed. Where it is otherwise impracticable, the Tribunal calls other meetings under Sec 98 (not for OPC). Default under 96–98 attracts fine up to ₹1,00,000 plus ₹5,000/day for a continuing default (Sec 99).
EGM (Sec 100) — called by the Board suo motu, or on requisition by members holding 1/10th paid-up capital (company with share capital) / 1/10th voting power (company without). Remember that at an EGM all business is special. The requisition ladder:
- Valid requisition deposited → company sends notice to members within 3 days (Rule 17(6)) →
- Board must proceed to call the meeting within 21 days →
- and hold it within 45 days of the requisition →
- else the requisitionists may call it themselves within 3 months (Sec 100(4)), giving 21 clear days’ notice (Rule 17(1)).
An EGM must be held within India — except that a wholly-owned subsidiary of a foreign company may hold it outside India, and a Specified IFSC company may with all-shareholder consent. A requisitionists’ EGM must be at the RO or in the same city/town, and never on a National Holiday (Rule 17(2)).
Requisitionists validly requisition an EGM and propose to hold it in Madrid, on Gandhi Jayanti. Is the meeting validly convened?
Two independent defects, each fatal: a requisitionists’ EGM must be held within India at the registered office or in the same city/town, and Gandhi Jayanti is a National Holiday, barred under Rule 17(2). The outside-India relaxation belongs only to a wholly-owned subsidiary of a foreign company (or a Specified IFSC company with all-shareholder consent) — not to requisitionists.
Answer: No — invalid on both counts. A requisitionists' EGM must be held within India, at the registered office or in the same city/town, and cannot be held on a National Holiday.
From notice to resolution — Sections 101–117
Notice (101): 21 clear days — exclude both the day of the notice and the day of the meeting; a Section 8 company needs only 14 days. Notice sent by post is deemed served after 48 hours (Rule 35(6)). Shorter notice is valid with 95% consent for an AGM; for any other general meeting, consent of a majority in number AND 95% of paid-up capital (or 95% of voting power where there is no share capital).
Explanatory statement (102): required for special business only — the 4 items of ordinary business need none. It must disclose every 2% shareholding interest of directors/KMP concerned. Non-disclosure that benefits a promoter/director/manager/KMP costs ₹50,000 or 5× the benefit, whichever is higher (102(5)).
Quorum [Sec 103]
Minimum members personally present for a valid meeting. Public company: up to 1000 members → 5; 1001–5000 → 15; above 5000 → 30. Private company: 2, flat, regardless of size. Proxies are never counted (Sec 112/113 representatives are). Articles may prescribe a larger number only — never smaller. Quorum is needed throughout the meeting, not just at the start (SS-2).
Half-hour rule (103(2)): no quorum within 30 minutes → the meeting stands adjourned to the same day next week — but a requisitionist-called meeting is CANCELLED, not adjourned. Any change of day/time/place of an adjourned meeting needs 3 days’ notice (103(3) proviso). The Chairman (104) is elected by show of hands; he has a casting vote only if the Articles empower it — a tie with no such clause means the resolution is dropped.
Proxy [Sec 105]
An instrument (Form MGT-11) authorising another person to attend and vote. Deposit ≥48 hours before the meeting — the Articles cannot extend this cap. A proxy cannot speak and votes only on a poll. One person may act as proxy for at most 50 members / 10% aggregate capital; a member holding over 10% gets a single dedicated proxy who can act for no one else (Rule 19(2)). Not available in a company without share capital unless the Articles allow; in a Section 8 company the proxy must also be a member. Proxies can be inspected from 24 hours before the meeting until its conclusion, on 3 days’ written notice (105(8)).
Voting runs through four modes — Section 106 first restricts voting only for unpaid calls or lien, on no other ground:
| Mode (Sec) | Trigger | Core rules |
|---|---|---|
| Show of hands (107) | Default at every meeting | 1 member = 1 vote; Chairman’s declaration is conclusive evidence |
| Remote e-voting (108) | Mandatory: listed + ≥1000 members (Rule 20); Nidhi and certain institutional investors exempt | Public notice/advertisement ≥21 days before; window open ≥3 days, closes 5 pm on the day before the meeting; cut-off date not earlier than 7 days before; scrutinizer’s consolidated report in 3 days |
| Poll (109) | Demand by 1/10th voting power or ₹5,00,000 paid-up (share-capital company) · 1/10th voting power (others) | Votes count per shareholding; demand withdrawable anytime; taken forthwith (adjournment/Chairman’s election) or within 48 hours (other questions); MGT-13 report in 7 days |
| Postal ballot (110) | 10 mandatory items (Rule 22(16)); OPC and companies with ≤200 members wholly exempt | Voting by post or electronic mode; 30-day response window; the items may instead be taken at a meeting where the company provides e-voting under Sec 108 |
The 10 mandatory postal-ballot items: change of objects clause; Articles change relating to a private company; RO shift outside the city/town; change in objects of unutilised IPO proceeds; issue of DVR shares; variation of class rights; buy-back; election of a director; sale of an undertaking; and loan/guarantee/security beyond the Section 186(3) limit.
Representation (111–113): members with 1/10th capital/voting power can force circulation of resolutions — deposit the requisition 6 weeks before the meeting (for a resolution requiring notice) or 2 weeks (any other item); not needed if the AGM is called within 6 weeks of the deposit. The President/Governor (112) and a body corporate (113) act through representatives who — unlike proxies — count for quorum and carry full voting rights, including by proxy and postal ballot.
Special resolution [Sec 114(2)]
Votes in favour must be ≥3× the votes against, with the notice stating the intention to propose it as special. Abstentions are excluded — it is NOT 75% of total members. An ordinary resolution (114(1)) needs favour greater than against — a simple majority, including the Chairman’s casting vote.
Special notice (115): given by members holding ≥1% voting power or shares with ≤₹5,00,000 paid-up; it must reach the company at least 14 days (and at most 3 months) before the meeting, and the company notifies members at least 7 days before (Rule 23) — the classic setting is auditor or director removal. A resolution passed at an adjourned meeting (116) is deemed passed on the date it was actually passed, not any earlier date. Filing (117): listed resolutions/agreements go to the Registrar in MGT-14 within 30 days — but banking companies, NBFCs and housing finance companies are exempt for Section 179(3)(f) loan/guarantee/security resolutions in the ordinary course.
Three courtroom favourites from this stretch:
- Joint shareholders: on disagreement, seniority — the order of names in the register — prevails (Table F, Reg. 52).
- Insolvent shareholder: can still vote by show of hands while on the register — voting is a membership-status right, not tied to beneficial interest.
- Director appointments: each director must be voted on separately — two or more cannot be clubbed in one resolution unless the meeting unanimously agrees.
Minutes, electronic records and the OPC carve-out — Sections 118–122
Minutes (118) are a fair and correct summary, prepared, signed and kept within 30 days. The Chairman’s discretion to exclude defamatory, irrelevant or detrimental matter is absolute — not challengeable. Minutes carry evidentiary value; tampering means imprisonment up to 2 years plus fine of ₹25,000–₹1,00,000. Members may inspect minute-books (119) for at least 2 hours a day and get copies within 7 working days. Listed companies and those with ≥1000 shareholders may keep records electronically (120), per Rules 27–30 — existing companies get 6 months to convert physical records (Rule 27). Section 8 companies are largely exempt from Section 118 (except the 30-day recording rule where the Articles allow circulation-confirmation).
Report on AGM (121): only listed public companies — Form MGT-15 within 30 days, signed by the Chairman or, if he is unable, by any 2 directors (one being the MD, if there is one) plus the CS. Do not confuse it with minutes, which every company prepares for every meeting.
OPC (122): Sections 98 and 100–111 do NOT apply. A resolution is passed when the member communicates it and it is entered in the minutes book, signed and dated — that date is the deemed meeting date. A single-director OPC passes Board resolutions by the same mechanism.
Preservation periods:
| Record | Preservation |
|---|---|
| Register of members · foreign register of members · minutes of general and Board meetings | PERMANENT |
| Register of DH/OSH (from redemption) · annual return copies (from filing) · foreign register of DH/OSH | 8 years |
Master timeline — the numbers this chapter is examined on:
| Period | Event | Where |
|---|---|---|
| 45 days/yr · 30 at a time · 7 days’ notice | Closure of register | 91(1), Rule 10 |
| 9 m first · 6 m subsequent · 15 m gap · 3 m extension | AGM clock (extension never for first AGM) | 96 |
| 3 days → 21 days → 45 days → 3 months | EGM: notice of requisition → Board acts → Board holds → requisitionists’ own window | 100, Rule 17(6) |
| 21 clear days (Section 8 co.: 14) | Notice of general meeting | 101 |
| 48 hours | Deemed service of posted notice | Rule 35(6) |
| 30 minutes | Quorum wait before adjournment/cancellation | 103(2) |
| 3 days | Notice of adjourned meeting (day/time/place change) | 103(3) proviso |
| 48 hours | Proxy deposit (MGT-11) | 105(4) |
| 24 hrs before → conclusion | Proxy inspection window (3 days’ written notice) | 105(8) |
| ≥21 days | Public notice/advertisement of e-voting | Rule 20(4)(v) |
| ≥3 days, closes 5 pm previous day | Remote e-voting window | Rule 20(4)(vi) |
| Forthwith / 48 hours | Poll: adjournment and Chairman’s election / other questions | 109 |
| 30 days | Postal-ballot response window | Rule 22 |
| 6 weeks / 2 weeks | Deposit for circulation: resolution / other item | 111(2)(c) |
| 3 months max – 14 days min · 7 days | Special notice to company · company’s notice to members | Rule 23 |
| 30 days | MGT-14 · minutes signed and kept · MGT-15 | 117, 118, 121 |
| 2 hours/day · 7 working days | Minute-book inspection · copies furnished | 119 |
| 6 months | Existing companies convert physical → electronic records | Rule 27 |
Penalty grid — exact amounts are asked; the pattern is base + daily continuing amount + cap, with the officer’s cap usually lower than the company’s:
| Default | Penalty | Section |
|---|---|---|
| Failure to maintain registers | Co. ₹3,00,000 · officer ₹50,000 | 88 |
| Declarant’s default (beneficial interest) | ₹50,000 + ₹200/day (max ₹5,00,000) | 89(5) |
| Company’s MGT-6 return default | Co. ₹1,000/day (max ₹5,00,000) · officer ₹1,000/day (max ₹2,00,000) | 89(7) |
| SBO fails to declare | ₹50,000 + ₹1,000/day after first (max ₹2,00,000) | 90(10) |
| Company default (SBO register/info/inspection) | Co. ₹1,00,000 + ₹500/day (max ₹5,00,000) · officer ₹25,000 + ₹200/day (max ₹1,00,000) | 90(11) |
| False SBO information | Section 447 fraud punishment | 90(12) |
| Wrongful closure of register | Co. and officer ₹5,000/day (max ₹1,00,000) | 91(2) |
| Annual return not filed | Co. ₹10,000 + ₹100/day (max ₹2,00,000) · officer ₹10,000 + ₹100/day (max ₹50,000) | 92(5) |
| PCS wrongly certifies annual return | ₹2,00,000 | 92(6) |
| Refusing register inspection | Co. and officer ₹1,000/day (max ₹1,00,000) | 94(4) |
| Default in AGM / Tribunal-called meeting | Fine up to ₹1,00,000 + ₹5,000/day continuing | 99 |
| Non-disclosure benefiting promoter/director/manager/KMP | ₹50,000 OR 5× benefit, whichever higher | 102(5) |
| Proxy-notice statement default · improper proxy solicitation at co. expense | Officer ₹5,000 · officer ₹50,000 | 105(3), 105(5) |
| Not circulating members’ resolution | Co. and officer ₹25,000 | 111(5) |
| MGT-14 not filed | Co. ₹10,000 + ₹100/day (max ₹2,00,000) · officer/liquidator ₹10,000 + ₹100/day (max ₹50,000) | 117(2) |
| Minutes default | Co. ₹25,000 · officer ₹5,000 | 118 |
| Tampering with minutes | Imprisonment up to 2 years + fine ₹25,000–₹1,00,000 | 118 |
| Refusing minute-book inspection | Co. ₹25,000 · officer ₹5,000 per default | 119(3) |
| AGM report default | Co. ₹1,00,000 + ₹500/day (max ₹5,00,000) · officer not less than ₹25,000 + ₹500/day (max ₹1,00,000) | 121 |
| OPC compliance default | Fine up to ₹5,000 + ₹500/day continuing | Rule 30 context |
- Testing a special resolution as “75% of total members” — it is favour ≥3× against, counted on votes cast; abstentions are excluded.
- Counting proxies for quorum — proxies never count, cannot speak, and vote only on a poll; Section 112/113 representatives count for quorum with full voting rights.
- Extending the first AGM — the Registrar’s 3-month extension exists only for subsequent AGMs; the first AGM’s 9-month limit is absolute.
- Letting Articles reduce quorum, or “adjourning” a requisitioned meeting for want of quorum — Articles may only enlarge quorum, and a requisitionist-called meeting is cancelled, not adjourned.
- Treating a large direct shareholder as an SBO — the Rule 2(1)(h) trigger is ≥10% indirect (or indirect + direct); direct-only holding never qualifies. And majority stake means strictly >50%.
- Swapping the forms: MGT-4 = registered owner’s declaration, MGT-5 = beneficial owner’s; MGT-6 = company’s beneficial-interest return, MGT-8 = PCS certification of the annual return.
- Confusing minutes (Sec 118 — every meeting, every company) with the AGM report (Sec 121 — MGT-15, only listed public companies).
- Mixing up poll and postal ballot — a poll is demanded at the meeting (1/10th voting power or ₹5,00,000 paid-up); a postal ballot is voting without attending, compulsory for 10 specified items.
Quick revision cards
Quorum numbers?
Notice of a general meeting?
Special resolution test?
Proxy rules in one line?
Poll demand and timing?
AGM clock?
EGM requisition ladder?
Register closure rule?
SBO thresholds?
Preservation periods?
OPC carve-out?
When is e-voting mandatory?