Penalty Increased By the Government for Not Filing Annual Return

MCA has notified stakeholders and directors of the company regarding the penalties imposed on non-filing of AOC-4 and MGT-7. These changes come with the amendment made in The Companies (Registration Offices and Fees) Second Amendment Rules 2018.

Ministry of Corporate Affairs(MCA) has issued notification apropos of The Companies (registration and fees) second amendment rule, 2018 on 7th May 2018. They have directed all the stakeholders and the directors of the companies to file the annual return, and Consolidated financial statement before the given due date mentioned in The Companies Act, 2013 or the Registration office has notified that they will levy heavy penalty on the companies, i.e. 100 rupees per day.

Hence the directors and the stakeholder of the companies which have not yet filled the return of previous years are advised to do that immediately before 1st July 2018 or they will have to pay onerous fees for the same.

The rules issued by MCA on 7th May 2018 are concerning sections 396,398, 399,403 and 404.

What is Annual Return Filling?

Once the companies have attained the certificate of incorporation under companies act, it is considered as a separate legal entity for which directors of the company are responsible.

Every company incorporated under the companies act shall prepare annual return form MGT-7 and AOC-4 which contains the particulars of the companies during the financial year. MGT-7 and AOC-4 are the forms which are to be filled by the companies together after Annual General Meeting (AGM) by 31st December because the due date to AGM is 30th September every year.

The penalty for both the forms is now increased to100 rupees per day that means that the companies will have to pay 200 rupees per day if they file the annual return after the due date mentioned in the companies act or notified by MCA.

Penalty for Late Annual Filing: Notification Issued by MCA

The Companies (Registration Offices and Fees) Second Amendment Rules 2018 has been notified on 7th May 2018. Accordingly, in case the due date of filings under Section 92 (Annual Return) or 137 (Annual Financial Statement) of the Companies Act, 2013 expires after 30/06/2018, the additional fee @Rs.100 Per Day shall become payable in respect of MGT-7, AoC-4, AoC-4 XBRL and AoC-4 CFS.

In all other cases where the belated annual returns or balance sheet/financial statement (Mandatory Compliance) which were due to be filed whether under the Companies Act, 1956 (23AC, 23ACA, 23AC XBRL, 23ACA XBRL, 20B, 21A) or the Companies Act, 2013 (MGT-7, AoC-4, AoC-4 XBRL and AoC-4 CFS) additional fee as per the applicable slab for the period of delay up to 30th June 2018 plus @Rs.100 per day w.e.f 1st July 2018 shall become payable. Stakeholders are advised to take note and plan accordingly.

Consequences for Late Annual return and Financial Form Filing

For a company to file its Income tax return and annual return, it will have to prepare financial statements which are submitted with MCA under Form AOC-4 and MGT-7 by the directors of the company, but if not provided to MCA before the prescribed due date they will be levied high penalty per day. Hence directors of the company must conduct the annual general meeting and file these prescribed Forms within the period mentioned in the act.


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