What is Form No. MGT-1 - Register of Members?

Form No. MGT-1 is the mandatory statutory Register of Members that every company incorporated in India must maintain under Section 88(1)(a) of the Companies Act, 2013 and Rule 3(1) of the Companies (Management and Administration) Rules, 2014.

This register contains complete details of all shareholders including their name, address, shares held, folio number, date of becoming a member, date of ceasing to be a member, and any transfers or transmissions.

The register must be maintained at the company's registered office and updated within 7 days of any share allotment, transfer, or transmission.

Key Information about Form No. MGT-1:

• MGT-1 is NOT an MCA filing—it's a physical/digital register maintained at the registered office, with extracts filed annually via MGT-6.
• The register must be kept in Form MGT-1 format (prescribed format with specific columns) and cannot be substituted with Excel cap tables.
• Every share transfer requires updating MGT-1 within 7 days, including recording the transferor's exit and transferee's entry.
• Members have an absolute right to inspect MGT-1 for free during business hours; companies cannot refuse except during AGM closure periods.
• OPCs and small companies must also maintain MGT-1 despite simplified compliance in other areas—there are no exemptions.

Understanding Form MGT-1: The Register of Members

Official Name: Register of Members

Legal Mandate: Section 88(1)(a) of Companies Act, 2013 requires every company to maintain a register of its members in Form MGT-1.

Prescribed Format: Rule 3(1) of Companies (Management and Administration) Rules, 2014 specifies the exact format and columns that must be used.

Purpose: MGT-1 serves as the official, legal record of:

• Who owns shares in the company
• How many shares they own
• When they became shareholders
• Any changes in shareholding

Think of it as: The company's official shareholder ledger, similar to a property registry but for equity ownership.

What is the Significance of MGT-1?

• Legal Ownership Proof: MGT-1 is the definitive proof of who owns shares. If there's a dispute about ownership, courts rely on MGT-1.
• Dividend Distribution: Only shareholders listed in MGT-1 are entitled to receive dividends.
• Voting Rights: Only members in MGT-1 can vote at general meetings (AGM, EGM).
• Share Transfer Validity: A share transfer is not complete until MGT-1 is updated with the new shareholder's name.
• Regulatory Compliance: MCA, income tax authorities, and courts can demand inspection of MGT-1 to verify ownership.

Mandatory Columns Required in Form No. MGT-1

Rule 3(1) specifies that MGT-1 must contain the following columns:

Column 1: Serial Number

• Sequential numbering of entries
• Each member gets a unique serial number

Column 2: Name and Address of Member

• Full legal name (as per PAN)
• Complete current address
• Update required if address changes

Column 3: Father's/Husband's Name (if applicable)

• For individual members
• Not required for corporate members

Column 4: Occupation

• Member's profession/business
• "Business," "Service," "Retired," etc.

Column 5: Email Address

• Mandatory for all communications
• As per Section 20 (deemed delivery)

Column 6: PAN or Passport Number

• PAN for Indian residents
• Passport for foreign shareholders

Column 7: Nationality

• Indian or specific foreign country

Column 8: Folio Number

• Unique identifier for the shareholder
• Continues even if shares partially transferred

Column 9: Number, Description and Class of Shares

• Number of shares held
• Type: Equity or Preference
• Class: Ordinary, CCPS, etc.

Column 10: Certificate Number

• Share certificate number(s) issued
• Distinctive numbers (from-to range)

Column 11: Date of Becoming a Member

• Date shares were allotted/transferred
• Or date name entered in register

Column 12: Date of Ceasing to be a Member

• Date of share transfer/transmission
• Blank if still a member

Column 13: Amount Paid or Treated as Paid

• Face value paid per share
• "Fully paid" or specific amount

Column 14: Remarks

• Any special notes
• Reference to transfer deed number
• Transmission details (in case of death)

When Should You Update the MGT-1?

1. At Incorporation

Timing: Within 7 days of incorporation

What to Record:

• Initial subscribers to Memorandum of Association (MOA)
• Number of shares each subscriber took
• Date of incorporation = Date of becoming member

Example:

• 2 founders subscribe to 50,000 shares each at incorporation

MGT-1 must show:

• Founder A: 50,000 shares, Date: February 1, 2026
• Founder B: 50,000 shares, Date: February 1, 2026

2. Fresh allotment of shares

Timing: Within 7 days of allotment

Trigger Events:

• Seed/Series funding (new investors)
• ESOP exercise (employees become shareholders)
• Bonus share issuance
• Rights issue

What to Record:

• New member's complete details (columns 2-7)
• Number of shares allotted
• Certificate number
• Date of allotment = Date of becoming member

Example:

• Seed investor gets 10,000 shares on March 15, 2026
• MGT-1 must be updated by March 22, 2026 (within 7 days)

3. Transfer of Shares

Timing: Within 7 days of board approval of transfer

What to Record:

For Transferor (Seller):

• Date of ceasing to be member (or partial cessation)
• Reduce share count if partial transfer
• Remarks: "Transferred to [Transferee Name] vide Transfer Deed No. [X]"

For Transferee (Buyer):

• New entry with full details
• Number of shares received
• New certificate number (if issued)
• Date of becoming member = Date of board approval

Example:

• Founder A transfers 5,000 shares to Investor B on April 10, 2026

MGT-1 updates by April 17, 2026:

• Founder A: Reduce from 50,000 to 45,000 shares
• Investor B: New entry with 5,000 shares

4. Transmission of Shares (Death/Insolvency)

Timing: Within 7 days of transmission approval

What to Record:

• Deceased member: Date of ceasing to be member (date of death)
• Legal heir/nominee: New entry with transmitted shares
• Remarks: "Transmitted from [Deceased Name] vide Succession Certificate/Will"

5. Buyback or Redemption

Timing: Within 7 days of completion

What to Record:

• Member's share count reduced (or fully extinguished)
• Date of ceasing to be member (if all shares bought back)
• Remarks: "Shares bought back and extinguished as per [Board Resolution Date]"

Where should you maintain Form No. MGT-1?

Physical Location

Mandatory Location: Registered office of the company

Section 88(1): "Every company shall keep and maintain the register of members at its registered office."

Cannot Be Kept At:

• Director's home
• Accountant's office
• Co-working space (unless that's the registered office)

What are the format options for MGT-1?

Option 1: Physical Register (Traditional)

• Bound book or loose-leaf binder
• Handwritten or typed entries
• Must be legible and permanent

Option 2: Digital Register (Modern)

• Maintained electronically (Excel, software, database)
• Must be downloadable/printable in MGT-1 format
• Backup required daily

Best Practice: Maintain both—digital for ease of updating, physical copy at registered office for inspection.

Inspection Rights Under Section 88

Who Can Inspect MGT-1?

1. Members (Shareholders) - Free Inspection

Right: Any member can inspect MGT-1 during business hours without payment.

Section 88(2): "The register of members shall, during business hours, be open to the inspection of any member without charge."

What They Can See: Entire register, including details of all shareholders

Cannot Be Refused: Except during AGM closure period (Section 91)

2. Non-Members - Paid Inspection

Right: Any person (not a member) can inspect MGT-1 by paying a fee.

Fee: ₹50 per inspection (as prescribed)

Purpose Examples:

• Due diligence by potential investors
• Verification by creditors
• Research by journalists/analysts

Company's Obligation: Must allow inspection within 5 days of request

How to Request Inspection of MGT-1?

Process:

1. Submit written request to company (with fee if non-member)
2. Specify date and time for inspection (during business hours)
3. Company must respond within 5 days
4. Inspection at registered office only (company cannot mail copies)

Extraction of Copies

Right: Inspecting person can take notes or request photocopies

Fee for Copies: ₹10 per page (as prescribed)

Timeline: Company must provide copies within 5 days of request

What is the difference between Register of Members (MGT-1 ) and Cap Table?

While startups use digital cap tables for day-to-day tracking, MGT-1 is legally distinct:

Key Point: Cap table is for management convenience; MGT-1 is for legal compliance. Both should be maintained, and they must reconcile.

Common Mistakes when it comes to MGT-1

Mistake 1: Not Updating Within 7 Days

Problem: Company issues shares on January 1 but updates MGT-1 on February 1 (30 days late)

Consequence: Non-compliance with Section 88(1), penalty liability

Solution: Set calendar reminders for "MGT-1 update" within 7 days of every share allotment/transfer

Mistake 2: Incomplete Information

Problem: Missing email address, PAN, or father's name

Consequence: Register deemed defective, cannot be relied upon in disputes

Solution: Collect all 14 columns' data at the time of allotment/transfer

Mistake 3: Not Reconciling with Share Certificates

Problem: MGT-1 shows 10,000 shares but certificates issued for 12,000 shares

Consequence: Discrepancy creates ownership disputes

Solution: Maintain "Certificate Register" alongside MGT-1, cross-check after every issuance

Mistake 4: Denying Inspection to Members

Problem: Company refuses inspection citing "confidentiality"

Consequence: Penalty under Section 88(4) – ₹10,000 per day per officer + ₹1 lakh for company

Solution: Members have absolute right (except during AGM closure); allow inspection

Mistake 5: Keeping MGT-1 at Accountant's Office

Problem: Register maintained at CA's office, not registered office

Consequence: Section 88(1) violation, penalties applicable

Solution: Keep original at registered office (can maintain copy at CA's office for backup)

Filing MGT-6: Annual Extract from MGT-1

What is MGT-6?

Form MGT-6: Return of Members filed annually with MCA

Content: Extract from MGT-1 showing:

• Total members as on financial year-end
• Changes during the year (new members, exits)
• Shareholding pattern

Filed Along With: Annual Return (Form MGT-7)

Deadline: Within 60 days of AGM

How MGT-1 Feeds into MGT-6

Process:

1. Maintain MGT-1 throughout the year
2. At year-end, extract summary data
3. Prepare MGT-6 showing opening members, changes, closing members
4. File MGT-6 as part of MGT-7 (annual return)

Example:

• FY 2025-26 starts: 5 members
• During year: 3 new members added, 1 exited
• Year-end: 7 members
• MGT-6 captures these changes with details from MGT-1

Penalties for Non-Compliance

Section 88(4) - Refusal to Allow Inspection

If Company Refuses Inspection:

• Company: ₹1 lakh fine
• Every officer in default: ₹10,000 per day (while refusal continues)

Example: Company refuses inspection for 10 days

• Company penalty: ₹1 lakh
• 2 directors in default: ₹10,000 × 10 days × 2 = ₹2 lakh
• Total: ₹3 lakh

Section 88(5) - Failure to Maintain Register

If MGT-1 Not Maintained or Defective:

• Company: ₹50,000 fine
• Every officer in default: ₹1,000 per day (until rectified)

Additional: Courts can order rectification at company's cost

Section 92 - Late Filing of Annual Return (MGT-6)

If MGT-6 Not Filed on Time:

• Standard penalties for late annual return filing apply
• ₹100 per day for company
• Officers also liable

MGT-1 for Different Company Types

Private Limited Companies

Obligation: Full MGT-1 maintenance mandatory

No Exemption: Even small private companies must maintain MGT-1

Practical Reality: Most startups maintain digital MGT-1 in cap table software, export to prescribed format for registered office copy

One Person Companies (OPC)

Obligation: Must maintain MGT-1 even with single member

Simpler: Only 1-2 entries (sole member + nominee)

Still Required: No exemption despite single ownership

Public Limited Companies

Obligation: Full MGT-1 maintenance mandatory

Additional: Must also maintain "Index of Members" if members exceed 50

Demat Shares: If shares are dematerialized, NSDL/CDSL maintain depositories register, but company must still maintain MGT-1 for physical shares

Section 8 Companies (NGOs)

Obligation: Must maintain MGT-1

Members: Can include individuals or institutions subscribing to Memorandum

Same Rules: All provisions of Section 88 apply

Practical Guide for Maintaining Form No. MGT-1

Step 1: Choose the format

Option A: Purchase printed MGT-1 register from stationery shop Option B: Create digital Excel/Google Sheet with all 14 columns Option C: Use cap table software that exports to MGT-1 format

Recommendation: Option C (modern, efficient, audit-friendly)

Step 2: Initial Entries (At Incorporation)

Record:

• All subscribers to MOA
• Date of incorporation
• Number of shares subscribed
• Issue share certificates, note certificate numbers

Step 3: Update on Every Share Transaction

Create Workflow:

1. Board approves share allotment/transfer
2. Within 3 days: Update MGT-1
3. Issue/endorse share certificates
4. File Form PAS-3 with MCA (within 30 days)

Step 4: Reconcile Regularly

Monthly Checklist:

• ✅ Total shares in MGT-1 = Authorized capital issued
• ✅ All share certificates issued match MGT-1 entries
• ✅ No pending updates (>7 days old)

Step 5: Keep at Registered Office

Physical Register: Bound book at registered office Digital Backup: Cloud storage with daily sync Access: Ensure someone at registered office can produce MGT-1 if inspection requested

Frequently Asked Questions

Q: Can we maintain MGT-1 only digitally without a physical register?

Yes, Section 88 allows electronic maintenance. However, you must be able to produce a printed copy immediately if inspection is requested. Best practice: Keep both digital (for ease) and physical (for compliance).

Q: What if a shareholder's address changes? Must we update MGT-1?

Yes. MGT-1 must reflect current address. Shareholders are required to inform the company of address changes under Section 89. Update MGT-1 within 7 days of receiving intimation.

Q: Can we refuse inspection during audit or year-end closing?

No. The only time inspection can be refused is during the period when the register is closed before AGM (up to 30 days, per Section 91). During audit or normal times, inspection cannot be denied.

Q: What happens if MGT-1 and share certificates show different numbers?

This is a serious discrepancy. MGT-1 is the legal record, so share certificates must be corrected/reissued to match MGT-1. Conduct an internal audit, identify the error source, and rectify immediately.

Q: Do we need MGT-1 if all shares are in demat form?

For listed companies, demat holdings are maintained by depositories (NSDL/CDSL), but MGT-1 is still required for any physical shares. For private companies, shares cannot be dematerialized, so MGT-1 is always mandatory.

Q: How long must we retain old MGT-1 entries after a member exits?

Permanently. Even after a member exits, their entry remains in MGT-1 with "Date of Ceasing to be a Member" filled. MGT-1 is a historical record. Companies must preserve registers for at least 8 years after a member exits (as per records retention rules).

MGT-1 Checklist

At Incorporation:

• ✅ Create MGT-1 register (physical or digital)
• ✅ Enter all subscribers' details (14 columns complete)
• ✅ Keep at registered office
• ✅ Issue share certificates, record certificate numbers

For Every Share Transaction:

• ✅ Board approves allotment/transfer
• ✅ Collect new shareholder's full details (PAN, email, address, etc.)
• ✅ Update MGT-1 within 7 days
• ✅ Issue/endorse share certificates
• ✅ Reconcile total shares

Monthly:

• ✅ Review pending updates (ensure none >7 days old)
• ✅ Reconcile MGT-1 with share certificate register
• ✅ Verify cap table matches MGT-1

Annually:

• ✅ Extract data for Form MGT-6
• ✅ File MGT-7 (annual return) including MGT-6
• ✅ Archive previous year's MGT-1 copy

Disclaimer: This guide is for informational purposes only and does not constitute legal advice. Companies Act provisions are subject to change. Always consult a qualified Company Secretary for MGT-1 maintenance and statutory compliance.

Last Updated: February 2026 | Based on Companies Act, 2013, Section 88 and Rule 3(1) of Companies (Management and Administration) Rules, 2014