Under the Indian Companies Act, 2013, private limited companies are required to submit their annual accounts and returns to the registrar of companies each year. This includes disclosing information about shareholders, directors, and other relevant details.
As per the Companies Act, the annual accounts must be filed within 30 days of the Annual General Meeting (AGM), while the annual return must be filed within 60 days of the AGM. If the AGM is held on the last day of September, the deadline for annual filing would be the 30th of October.
The annual filing process involves submitting two important forms:
- Form MGT-7 (Annual Returns): This form should be filed within 60 days of the AGM and provides details about the company’s annual activities and its shareholders.
- Form AOC-4 (Financial Statements): Within 30 days, the company must file this form along with the balance sheet, statement of profit and loss account, and director’s report.
It is crucial for every private limited company to comply with these annual filing requirements to ensure proper legal and regulatory compliance.
Annual filings of a company offer several benefits, including:
- Financial Transparency: Annual filings provide a clear picture of a company’s financial position, allowing stakeholders to assess its profitability and overall financial health.
- Legal Confirmation: Regular filings with the government authorities, such as the Registrar of Companies (ROC), serve as evidence of the company’s existence and legal compliance.
- Avoidance of Penalties: Timely annual filings help companies avoid penalties and fines imposed by regulatory bodies. Non-compliance can result in financial burdens and legal consequences.
- Continued Operations: Regular filing of annual reports helps protect the company’s status and prevents the risk of its name being struck off by the ROC. This ensures the company’s continued operation and reputation.
- Investor Confidence: Complete and accurate annual filings enhance investor confidence in the company, as it demonstrates transparency, accountability, and compliance with legal and financial regulations.
- Regulatory Compliance: Annual filings ensure that the company complies with the requirements of the Companies Act and other relevant laws and regulations, promoting good corporate governance practices.
In summary, annual filings of a company offer benefits such as financial transparency, legal confirmation of existence, protection against penalties, continuity of operations, investor confidence, and regulatory compliance. It is essential for companies to fulfill their annual filing obligations to uphold transparency, legality, and stakeholder trust.
Here is a simple checklist of requirements for annual filings of a company:
- Balance sheet: The financial statement that shows the company’s assets, liabilities, and shareholders’ equity at the end of the financial year.
- Profit & loss account: The financial statement that summarizes the company’s revenues, expenses, and net profit or loss for the financial year.
- Auditor’s report: A report prepared by the company’s auditor that provides an opinion on the accuracy and fairness of the company’s financial statements.
- Company PAN: The Permanent Account Number issued by the Income Tax Department to the company.
- Auditor’s name: The name of the auditor appointed by the company to conduct the audit of its financial statements.
- Appointment details of auditor: Information about the appointment of the auditor, including the date of appointment and the period for which they are appointed.
- Auditor PAN: The Permanent Account Number of the auditor.
- Details of share transfers: Information about any transfers of shares that took place during the financial year.
- Details of allotments: Information about any new shares that were issued or allotted during the financial year.
These requirements form the basis for the company’s annual filings and help ensure compliance with regulatory obligations.
Process for the annual filings of a company:
Step 1: The company’s directors hold a board meeting to approve the financial statements, board report, and annual return.
Step 2: The company conducts its Annual General Meeting (AGM) where necessary resolutions are passed.
Step 3: The resolutions passed in the AGM are recorded in the minutes of the meeting.
These steps form the basic process for completing the annual filings of a company and ensuring compliance with regulatory requirements.
List of key deliverables for the annual filings of a company:
- AOC-4: Financial statements (balance sheet, profit and loss account, director’s report)
- MGT-7: Annual return (shareholder and director details)
- Acknowledgement copies: Receipts or proof of filing
These are the main documents and forms that need to be prepared, filed, and obtained as part of the company’s annual filings.
What do you want to know?
The person who signed the director’s report must also sign the annexure to the director’s report, according to section 134 of the corporation’s act. There should be no differences between them.
According to the Companies Act of 2013, every AGM must be held in person rather than via video conference. However, the company’s financial accounts can be authorised via video conferencing. (Due to Covid 19 Pandemic, the registrar of companies have allowed to conduct Board meetings and AGMs through video conferencing)
All companies (private limited company, one Person Company, Public limited company, section 8 company, etc.) are required to file an annual return with the MCA every year.
Audited financial statements are necessary for every company from its incorporation. The company must file the audited statements only.
The Registrar of company may impose a penalty of Rs. 100/- per day from the date on which the forms are due to be filed until the form is actually filed. Further, the directors of the company may attract disqualification for non compliance as per Section 164 of the Companies Act 2013.