In this guide we are going to tuch the following topics:
- Introduction to Annual Filing
- Timelines for Annual Filing
- Estimated Normal and Additional Government Fees for small Companies
- Consequences of not complying with annual filing
- When a company obtains the status of a Defaulting Company
- Procedure to be adopted for getting the status of an active company and making the company fully compliant
- Benefits of converting a company into an active company
Introduction to Annual Filing:
Any Company incorporated in India whether it is a subsidiary of the foreign company, joint venture entity and others under the Companies Act, all are required to file few forms in an electronic mode with the concerned Registrar of Companies (ROC).
What are the e-forms filed with ROC every year?: AOC – 4: Purpose :
To file with Registrar of Companies the following documents:
- Financials of the company – Balance Sheet, Profit and Loss account, Cash flow statement, it’s respective schedules
- Auditor’s Report – It is the view of Statutory Auditor on the financial position of the company and its affairs.
- Accounting Policies – These are the accounting treatment given by the company while preparing accounts and financial statements
- Notes to accounts – These are other financial disclosures required to be given by companies which are not separately reflected in Balance Sheet and Profit and Loss account and it’s scheduled
- Director’s Report – It is the Director explaining company’s affairs about various matters affecting shareholders interest along with replies to qualifications raised by the Statutory Auditor in its Report
MGT – 7: Purpose:
To disclose Registrar of Companies the following information
- List of Directors including executive and non-executive
- List of Shareholders
- Change in Directors during the financial year
- Change in Shareholding pattern during the financial year
- Dates of Meetings of Board, Committees and Shareholders held during the year
- Total share capital Authorised, Issued, Subscribed, called up and Paid up
- Total amount of Debentures, Deposits, Loans, secured or unsecured as on financial year end date
ADT – 1 Purpose:
For Intimation of Appointment of Statutory Auditor to ROC
TIMELINES FOR ANNUAL FILING:
As per newly introduced provisions of Companies Act 2013, every company shall close its financial year on 31st March of each year (except some exceptions for first the financial year).
It is to be noted that all the timelines of Annual filing depend upon the end of financial year.
|Sr. No.||Name of Event||Maximum time limit||The last date by which event has to be completed in any case|
|1||Hold Annual General Meeting||Within 6 Months of end of financial year||30th day of September every year|
|2||Filing of Form ADT 1||Within 15 days of Annual General Meeting||14th day of October|
|3||Filing of Form AOC 4||Within 30 days of Annual General Meeting||29th day of October every year|
|4||Filing of Form MGT 7||Within 60 days of Annual General Meeting||29th day of November every year|
Estimated Normal and Additional Government Fees for Small Companies:
- The Normal Government fees perform applicable to companies depends upon its Authorized
- The Additional filing fees depends upon two factors, namely, Normal filing fees and the time period of delay in filing forms
|Additional fee rules for period of delay||All forms|
|Up to 30 days||2 times of normal fees|
|More than 30 days and up to 60 days||4 times of normal fees|
|More than 60 days and up to 90 days||6 times of normal fees|
|More than 90 days and up to 180 days||10 times of normal fees|
|More than 180 days||12 times of normal fees|
The estimated government fees perform are given in details in the table below:
|Sr. No.||Authorized capital||NORMAL Filing Fees (Amount in Rupees)||MAXIMUM ADDITIONAL Filing Fees (12 Times of Normal Filing Fees) (Amount in Rupees)||Total Filing Fees Perform (Amount in Rupees) for all annual filing forms||Total filing FEES PER YEAR if not filed within timelines (Amount in Rupees) (AOC – 4, MGT -7, ADT – 1)||Total filing FEES PER YEAR if filed within time (Amount in Rupees) (AOC – 4, MGT -7, ADT – 1)|
|1||Less than 1,00,000||200||2400||2600||7,800||600|
|2||1,00,000 to 4,99,999||300||3600||3900||11,700||900|
|3||5,00,000 to 24,99,999||400||4800||5200||15,600||1200|
|4||25,00,000 to 99,99,999||500||6000||6500||19,500||1500|
|5||1,00,00,000 or more||600||7200||7800||23,600||1800|
Consequences of not complying with Annual Filing:
|Description of Events||Consequences of not complying with event|
|Holding Annual General Meeting||Company and every officer of the company (including DIRECTOR) shall punishable with fine – Upto Rs. 1,00,000/- Penalty in case of Continuing Default – Rs. 5000/- per day|
|Filing of Form MGT 7||1. Company shall be punishable with fine – Not less than Rs. 50,000/- which may extend to Rs. 5,00,000/- 2. Every officer (including Director) – – Fine: Not less than Rs. 50,000/- which may extend to Rs. 5,00,000/- OR – imprisonment for a term which may extend to six months OR – Both|
|Filing of Form AOC 4||All the directors – Fine: Not less than Rs. 50,000/- which may extend to Rs. 5,00,000/- OR – imprisonment for a term which may extend to One Year OR – Both|
When a company obtains a status of a Defaulting Company:
Companies Act Does not define Defaulting Company.
However, if a company does not comply with annual filing for a period of 3 years or more, the Registrar of Companies may change its status to “Defaulting company” or “Defunct Company”.
CONSEQUENCES for Company:
The company cannot file any e-form except Annual filing forms, forms for appointment of Director, Forms for Application to Registrar of companies, etc.
It means that company cannot execute any activity such as a change in Name, Change in registered office, Issue or allotment of shares, etc.
CONSEQUENCES for Director:
- Unable to sign e-form of any company: Many times situation arises while filing e-form by a company which is not a defaulting company, that a message pops-up that the Director is not eligible to sign the e-form as the signing director is also a director of defaulting company.In such a situation, such a director is required to complete annual filing of that defaulting company and then he becomes eligible to sign e-form of any other company.
- Disqualified to become a Director in any other company: If a company does not file its financials (AOC – 4) or Annual Return (MGT – 7), every director of such company is disqualified to be a director in any other company.
CONSEQUENCES for Professionals:
Company Secretaries and Chartered Accountants of this company cannot certify forms of any company.
Procedure to be adopted for getting the status of an active company and making the company fully compliant
- Preparation of forms AOC 4, MGT 7 and ADT 1 of the company and uploading it on the website of MCA.(For documents required and government fees for filing the above forms details are given in the previous slide)
- Application to the Registrar of Companies to change the status of the company to Active.
Benefits of making the company Active: Benefits with reference to Legal Consequences:
- Avoid legal consequences of penalty, imprisonment to Directors and other officers in default (could not understand this sentence)
- Directors of company becomes bee eligible to sign e-forms of any other company and does not become disqualified to become director in any other company
- It serves as a notice to public of any information required to be given by the company under any act
- It may serve as a proof or evidence in the court of law
Benefits with reference to other than legal Consequences:
- Helpful in creating a good public image While drafting Board’s Report, Companies include some additional information in it which may include:
- Companies include Management Discussion which serves as a medium of vital information to the public. the company through this, communicates various future plans and running projects, future prospects, strengths of the company, steps taken or to be taken by the company to overcome its weaknesses and various other information which creates a good image in mind of public, government and regulatory authorities.
- Transparency: If a company follows all legal provisions of the Act in an ethical manner, it means, it maintains transparency among public and creates an image of the ethical company in minds of public, regulatory and government.
As these documents are filed with Government Authorities and certified by professionals, it seems to public documents can create more confidence t than any other document even if it is circulated in public through any other expensive medium. Therefore it is a cheap way to communicate information to the public while gaining more confidence.
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