Daily Penalty Imposed For Delay In Annual Filing and Consequences For Non-filing

We have sent out quiet a few mailers intimating you about the daily penalty imposed by the regulator for delay in Annual filings which will result in a huge financial burden on the company. We now want to highlight a few more practical issues faced in the process.

Requirements for Annual Filings as per the Act:

Every Company Incorporated under Companies Act, 1956/2013 is required to do the Annual filings with the Registrar of Companies in the Forms and within the timelines as mentioned below:

  • Annual Financial Statements (Balance Sheet and Statement of Profile & Loss ) in Form AOC-4/ AoC-4 XBRL and AoC-4 CFS within 30 days of its Annual General Meeting (AGM) pursuant to Section 137(1) of Companies Act, 2013 and
  • Annual Return in Form MGT-7 within 60 days from date of its Annual General Meeting (AGM) pursuant to Section 92(1) of Companies Act, 2013.

In case a company fails to file the above mentioned forms within the prescribed time, then there is  a daily penalty of Rs. 100/- per day. 

The other important points to be noted in this regard are as under:

1.    Stringent provisions of the Act: Non Filing of Financial Statements and Annual Return  for a continuous period of  more than two  Financial Years  gives the power to the Registrar of Companies to strike off the name of the Company from the Register of Companies as per the procedure laid down in Companies Act, 2013.

In case the default is for three (3) Financial years, it results in disqualification of Director’s associated with the defaulted company. The revival process of the Company and removal of Director disqualification in not only complex, cumbersome but also very costly exercise.

2.    Non-filing of KYC of Directors – In case of a Company, if a particular Director/s has/have not completed their KYC requirements and such Director is the signatory to the Financial statements/Board Report/Annual Filing Forms and his/her DIN No. is captured in the Forms, then at the time of Filing of forms, the system automatically rejects it at the pre-scrutiny stage.

3.    Technical issues with MCA Portal – Due to the last minute rush of filings on the MCA portal during the peak season, there are various issues faced beyond our control leaving us helpless.

As a result of the serious consequences and the stringent penal provisions imposed, Company’s are advised to file their KYC form, if pending, arrange for Auditing of Financial Statements for FY 2017-18, conduct their Annual General Meeting and undertake Annual Filings well in advance.  In case of delay in filings due to the above reasons, we shall not be held responsible nor shall bear the cost of delay. 

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