Maintaining Your Statutory Register of Members (Form MGT-1)
Quick Summary
Under Section 88 of the Companies Act, 2013, every Indian company must maintain a Register of Members in Form MGT-1. This is not optional — failure to maintain it attracts a penalty of ₹3 Lakh on the company plus ₹50,000 per officer in default. This article shows how Founding Legals auto-generates MGT-1 every time you update your cap table.
The Legal Breakdown / Why It Matters
Register of Members (Form MGT-1): A statutory register, prescribed under Section 88(1)(a) of the Companies Act, 2013 and Rule 3 of the Companies (Management and Administration) Rules, 2014, containing details of every member (shareholder) of the company.
What MGT-1 Must Contain
| Section | Required Details |
|---|---|
| Member Identity | Name, Father's/Mother's/Spouse's name, address, email, occupation, PAN, nationality, CIN/LLPIN (if member is body corporate) |
| Shareholding | Date of becoming member, folio number, share certificate numbers, distinctive numbers |
| Share Class | Equity / Preference / CCPS — and class-wise breakdown |
| Consideration | Amount paid, calls in arrears, mode of payment |
| Transfers/Transmissions | Date of cessation, mode (transfer/transmission/forfeiture/buy-back) |
| Nominee | Name and address of nominee, if filed via Form SH-13 |
Where It Must Be Kept
The register must be maintained at the registered office of the company. It may be kept at another place in India only if (a) approved by a special resolution and (b) Form MGT-14 is filed with the ROC.
Inspection Rights
Under Section 94 of the Companies Act, 2013:
- Members and debenture holders: free inspection during business hours.
- Any other person: inspection on payment of prescribed fee.
- Refusal to allow inspection: penalty of ₹1,000 per day of default.
How to Do It on Founding Legals
- Step 1: The Register of Members is auto-created the moment you set up your cap table. Every shareholder added automatically generates an MGT-1 row.
- Step 2: Go to Cap Table → Statutory Registers → MGT-1. View the live, MCA-formatted register. Every column required under Rule 3 is pre-populated.
- Step 3: When you issue new shares via the platform, the register updates within seconds — folio, share certificate, and distinctive numbers are auto-allotted in continuous sequence.
- Step 4: Click "Export for Inspection" to download the register as a stamped PDF, or share a view-only link with members.
- Step 5: When a share transfer happens, the register automatically updates the cessation entry for the transferor and creates a new entry for the transferee.
Under Section 88(5) of the Companies Act, 2013, failure to maintain the Register of Members attracts a penalty of ₹3,00,000 on the company and ₹50,000 on every officer in default, plus ₹500 per day for continuing default. The MCA actively checks this during inspections and investor due diligence.
Encourage every shareholder — especially founders — to file a Form SH-13 nomination when they become members. Without a nominee, transmission of shares on death goes through a probate process that can freeze the cap table for 6–18 months. Founding Legals prompts every member to file SH-13 during onboarding.