Companies Act, 2013 – Annual Return Significant Contents

Introduction:

Although Private Limited Company is the most popular form of starting a business, there are various compliances which are required to be followed once your business is incorporated. Managing the day to day operations of your business along with complying the corporate laws can be little taxing for any entrepreneur. Hence, it is essential to take help of a professional and also understand such legal requirements to ensure timely fulfilment of compliances, without any levy of interest or penalty.

Annual return is an important document, designed to provide information to stakeholders about the company, promoters, members, meetings and remuneration of directors and key managerial persons (KMP).

The intention of legislation under Companies Act, 2013 is to improve corporate governance and empower shareholders. The Act has incorporated a framework which is based on self-regulation but with enhanced disclosures and accountability on the part of companies and their managements.

All companies are required to file returns at the end of the financial year. Both small and large companies need to follow the same procedure. While many smaller entities tend to skip this altogether, it can lead to heavy fines from the Registrar and even to the blacklisting of the company’s directors. So do note what steps need to be taken to file the returns:

 

Annual Filing Eforms:

As a part of Annual Filing, Companies incorporated under the Companies Act 1956 or Companies Act 2013, are required to file the following eForms with the Registrar of Companies (ROC):

*The annual return, filed by a listed company or, by a Company having paid-up capital of Rs.10 Crores or more OR turnover of Rs.50 Crores or more shall be certified by a PCS in Form No. MGT-8

*Extract of Annual Return: An extract of the annual return in Form No MGT-9 shall form part of the Board’s report.

Objective of Filing the return: The basic purpose of filing annual return with the Registrar of Companies (‘ROC’) is to provide the annual information about the Company to the ROC and its members about the Company’s general compliances. It is the responsibility of the management to file the annual return with the ROC.

After Completion of Two Year of Companies Act, 2013, Law has been settled down. Now it is the high time for the members to start work on Annual Return (MGT-7) and Director Report. Because there were many amendments in Rules, many circulars, notification came during the year 2015-16 which will affect the Annual filing of the Company.

The companies under the Companies Act 2013 are required to E-file annually the following documents with the Registrar of Companies (ROC) as follow:

Type of Document TYPE OF E-FORM Purpose of Filing of Form
Balance –Sheet Form AOC-4. Filing of Financial Statement
Consolidated Financial Statement Form AOC-4 (CFS) Companies which have Subsidiary Company, Associate Company and Joint Ventures.
Profit & Loss Account Form AOC-4. Filing of Profit & Loss Account
Annual Return Form MGT-7. Filled by Companie with Share Capital. To give information relating to directors and shareholder for the period of Financial Year.
Annual Return Form MGT-7 To be filled by companies not having share capital.
Director Report Director Report along with Following Annexure:

1. AOC-2

2. MGT-9

3. Secretarial Audit Report

Filing of CTC of Resolution Form MGT-14

(for the Companies except Private Limited Company)

For the purpose of adoption of Balance Sheet and Director Report.

PROVISIONS OF COMPANY LAW RELATING TO ANNUAL RETURN AS PER COMPANY ACT 2013:

CERTIFICATION OF ANNUAL RETURN (MGT-8):

a) All Listed Companies

b) Every Company having:

Paid-Up share capital of 10 Crore (Ten Crore) rupees or more or

Turnover of 50 Crore (fifty crore) rupees or more

SIGNING OF ANNUAL RETURN (DSC on MGT-7):

a) All Listed Companies

b) All Public Companies

c) Private Limited company having:

Paid up share Capital Exceeding 50 lac

Turnover exceeding 2 Crore

Companies Exempt from signing of annual return from Company Secretary:

a) One Person Company

b) Small company

The information that needs to be included in the annual return has been increased by Companies Act, 2013. The additional information required, includes particulars of holding, subsidiary and associate companies, remuneration of directors and key managerial personnel, penalty or punishment imposed on the company, its directors or officers.

Section 88 (5):

If a company does not maintain a register of members or debenture-holders or other security holders or fails to maintain them in accordance with the provisions of sub-section (1) or sub-section (2), the company and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees and where the failure is a continuing one, with a further fine which may extend to one thousand rupees for every day, after the first during which the failure continues.

Section 92 (1):

Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year regarding:—

1. Its registered office, principal business activities, particulars of its holding, subsidiary and associate companies;

2. Its shares, debentures and other securities and shareholding pattern;

3. Its indebtedness;

4. Its members and debenture-holders along with changes therein since the close of the previous financial year;

5. Its promoters, directors, key managerial personnel along with changes therein since the close of the previous financial Year;

6. Meetings of members or a class thereof, Board and its various committees along with attendance details;

7. Remuneration of directors and key managerial personnel;

8. Penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and Appeals made against such penalty or punishment;

9. Matters relating to certification of compliances, disclosures as may be prescribed;

10. Details, as may be prescribed, in respect of shares held by or on behalf of the Foreign Institutional Investors indicating their names, addresses, countries of incorporation, registration and percentage of shareholding held by them; and

11. Such other matters as may be prescribed, and signed by a director and the company secretary, or where there is no Company \ secretary, by a company secretary in practice:

Section 92 (4):

Every company shall file with the Registrar a copy of the annual return, within 60 (sixty) days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed, within the time as specified, under section 403.

Section 92 (5):

If a company fails to file its annual return under sub-section (4), before the expiry of the period specified under section 403 with additional fee, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.

Section 92 (5):

If a company fails to file its annual return under sub-section (4), before the expiry of the period specified under section 403 with additional fee, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.

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