implication of Non-filing of Annual Form -If Companies Amendment Bill, 2017 Become Act
implication of Non-filing of Annual
Form
If Companies Amendment Bill, 2017 Become Act
Short Summary:
In this Flash editorial, the
author begins by referring the provisions of section 92 & 137 of Companies
Act, 2013 relating to filing of MGT-7 & AOC-4. As the Companies Amendment
Bill, 2017 has been passed in Lok Sabha there are many alteration/
modifications are prescribed under the Bill. One of the Major impacts of the
Bill is on the filing of MGT- 7 & AOC-4 Like: increase in additional fees,
trigging of Compounding etc.
The main shove of the research, is upon the matters like: (i) what shall
be side effect on Additional Fees of
filing of Annual Form after Companies Amendment Bill, 2017 become Act? (ii)
What shall be the Trigging Period for
the compounding of offence of not filing of Annual form within the time
prescribed under particular section? (iii) What shall be the effect on avaibility of “Exemptions to
Private Limited Company” in case of default of filing of Annual Forms? Etc.
This is article no. 251 of the series of editorials
written by the author on corporate laws {Including Companies Act, 2013, SEBI,
RBI Regulations, IBC, LLP Act, 2008 etc.}.
Introduction:
As per Companies Act, 2013 it is compulsory for the company
to file Annual Return in e-form MGT-7 and financial statement in e-form AOC-4
after closing of financial year as per provisiosn mentioned below. If company
not be up to snuff for filing the same within prescribed time period then
company have to put up with many type of complexities like: compounding on non
compliance of sections, condonation of delay in filing of form,
disqualification of directors, non avaibility of exemptions to private limited
Companies, heavy additional fees etc.
As we are aware MCA has already closed approximately
100,000/- Companies Due to non Compliance in filing of Annual Form. MCA has
taken many other actions in relation to the same like:
·
MCA has issued notices to the
directors of Company for action in case of non compliance of Section 137 &
92.
·
They have touched the
additional fees and compounding of non compliance of Section 137 & 92 under
Companies Amendment Bill, 2017.
·
They have further touch the
point in the Exemption Notification given to private limited Companies issued
on 13th June, 2017.
A. Provisions
under Companies Act, 2013
Language of Sections:
1.
Section 137- Filing of Financial Statement: A copy of the financial
statement , including consolidated financial statement,
if any, along with all the documents which are required to be or attached
to such financial statements under this Act, duly adopted at the annual
general meeting of the company, shall be filed with the Registrar WITHIN THIRTY
DAYS OF THE DATE OF ANNUAL GENERAL MEETING in such manner,
with such fees or additional fees as may be prescribed WITHIN
THE TIME SPECIFIED UNDER SECTION
403
2. Section
92- Filing of Annual Return: Every company shall file with
the Registrar a copy of the annual return, WITHIN 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 AS SPECIFIED, UNDER SECTION 403 or additional fees as may be prescribed, within
the time.
|
Type of Document
|
Section
|
Time Period for Filing
|
TYPE OF E-FORM
|
Purpose
of Filing of Form
|
|
Financial Statement
|
137
|
Within 30 days of Annual General Meeting
|
Form AOC-4.
|
Filing of Financial
Statement with the ROC
|
|
Annual
Return
|
92
|
Within 60 days of
Annual General Meeting
|
Form MGT-7.
|
To be filled by Companies having share Capital. To
give information relating to directors and shareholder for the period of
Financial Year.
|
One can opine that as per Section 137 and 92 company have to
file the financial statement and Annual Return within 30 and 60 days of Annual
General Meeting. If Company fails to file the same with in prescribe period of
30 and 60 days then with additional fees can file within time mentioned under
Section 403 (i.e. 270 additional days).
Language of Section
403:
(1)
Any document, required to be submitted, filed, registered or recorded, or
any fact or information required or authorised to be registered under this
Act, shall be submitted, filed, registered or recorded WITHIN THE TIME SPECIFIED
IN THE RELEVANT PROVISION ON PAYMENT OF SUCH FEE AS MAY
BE PRESCRIBED:
Provided that any document, fact or
information may be submitted, filed, registered or recorded, after the
time specified in relevant provision for such submission, filing, registering
or recording, WITHIN A PERIOD OF TWO HUNDRED AND SEVENTY DAYS FROM THE DATE
BY WHICH IT SHOULD HAVE BEEN SUBMITTED, filed, registered or recorded, as
the case may be, on payment of such additional fee as may be prescribed:
First
- Point–
Side Effects of Companies Amendment Bill - 2017
I.
Compounding:
As per above mentioned provisions of
Companies Act, 2013 if company fails to file Annual form within the additional
time prescribed under Section 403 (i.e. 270 days) then company have to file
application with NCLT for compounding of offence u/s 137 and 92.
However, it can be opine that as per
the provisiosn of Companies Act, 2013 Compounding shall be trigger after
completion of additional 270 days. Practically
Corporates use this period of 270 days as per their convenient and files the
annual form within additional 270 days with additional fees.
Major Effect:
It is proposed to remove the
reference of Section 403 from the section 137 and 92 under Companies Amendment
Bill, 2017.
One can opine that once the bill
becomes Act, no additional time of 270 days shall be available for filing of
MGT-7 and AOC-4 u/s 92 & 137. However, the requirement of compounding shall
be trigger from 31st day and 61st day of Annual General
Meeting.
II.
No Upper Cap - Additional Fees:
In the proposed Companies (Amendment)
Bill, 2017 It is proposed that if any company fails to comply with the
provisions of Section 92 & 137 the Companies Act, 2013 i.e. filing of
e-form MGT-7 and AOC-4 with in period of 60 days and 30 days of date of Annual
General Meeting “Then it proposed in the bill that the Company can file such
form subject to additional fees of Rs. 100/- per day.
Calculation
of Time Period and Additional Fees:
|
S.
No.
|
Normal
Fees (Calculation for the Company having capital of Rs. 100,000/-)
|
Period
of Default
|
Additional
Fees as per Companies Act, 2013
|
Additional
Fees as per Companies Amendment) Bill, 2017
|
|
A.
|
Rs. 300
|
30
|
600
|
3000
|
|
B.
|
31
|
1200
|
3100
|
|
|
C.
|
60
|
1200
|
6000
|
|
|
D.
|
61
|
1800
|
6100
|
|
|
E.
|
90
|
1800
|
9000
|
|
|
F.
|
91
|
3000
|
9100
|
|
|
G.
|
180
|
3000
|
18000
|
|
|
H.
|
181
|
3600
|
18100
|
|
|
I.
|
300
|
3600
|
30000
|
|
|
J.
|
301
|
3600
|
30100
|
Major Effect:
It is proposed alter the method of
additional fees on filing of e-form MGT-7 & AOC-4 as mentioned above..
One can be opine that once the bill
becomes Act, there shall be huge additional fees for non-filing of Annual Forms
and such fees shall be increase by each day. “There is no upper cap in additional Fees”
III.
Double/ Higher Additional Fees:
In the Company commits default of 2
or more occasions in filing of documents, facts or information required u/s 92
and 137 of the Act, the Company has to pay higher additional fee, as may be
prescribed and which shall not be lesser than “Twice the Additional Fees” as mentioned above.
Major Effect:
One can be opine that once the bill
becomes Act and make non compliance of provision of Section 92 & 137 twice
then additional fees shall be “Twice the actual additional fees”.
Second
- Point of Research –
Effects of Exemption Notification to Private Limited
Company
Under the exemption notification a
condition is mentioned as follow “These exemptions shall apply to the Private
Company “Which has not committed a default in filing its financial statements
under Section 137 of the Act OR annual Return u/s 92 of the said Act”
Major Effect:
As per the conditions if a Private
Company fails to comply with the provision of Section 137 & 92 pertaining
to filing of e-form AOC-4 & MGT- 7 then exemptions give to private limited
Companies by the notification dated 5th June, 2015 and 13th
June, 2017 shall not be available.
Once Bill, 2017 become Act then
non-compliance shall be trigger from 31st day and 61st
day. Thus, one can opine that after Bill, 2017 become act, if a private Company
make default in filing of Annual Form AOC-4 & MGT – 7 with in 30 and 60
days then exemption shall be withdraw from such Company.
Conclusion:
All these efforts of MCA or Central Government give an idea
that they are in frame of mind of taking severe actions for non compliance of
Section 137 & 92. As non compliance of these two Sections have an effect on
the transparency about the financial structure of the Company, Management
structure of the Company. It is required to stringent the provisions to get it
compliance by the Corporates.
As per the Companies Amendment Bill, 2017 and condition under
the exemption notification to private limited Companies dated 13th
June, 2017. Here the question,
If Bill, 2017 passed
by the Rajya Sabha and got the consent of president in that case, the Companies
I.
Which has not filed e-form
AOC- 4 & MGT-7 for any financial year ended on 31.03.2016 or any previous financial
year then additional fees shall be as per Companies Act, 2013 (2 times, 4 times
etc) or as per Amendment Bill (i.e. Rs. 100/- per day)?
II.
Which has done Non
compliance of Section 137 or 92 then the default shall be trigger from 31st
Day and 61st Day or 301st Day and 331st Days
(i.e. with additional 270 days)? Whether Compounding shall be required from 31st
Day and 61st Day or 301st Day and 331st Days
(i.e. with additional 270 days)?
III.
If company fails to file
for the F.Y. 2014-15 and 2015-16 then whether it will be consider as committing
of default 2 times/ occasions.
IV.
Whether this 2 time of
additional fees only in case of non filing of annual forms or non filing of any
other forms also?
V.
VI.
The non compliance done by
private limited Companies shall trigger the non-avaibility of exemptions. How
the private Company can avail such exemptions;
i.
By filing of Annual Forms
with Additional Fees?
ii.
By compounding u/s 137
& 92?
Therefore, one can opine that it is urgent and important for
all the Corporates and professionals to file all the pending annual e forms if
any with the ROC at the earliest. Before passing of Amendment Bill, 2017 from
the Rajya Sabha.
|
(Author – CS Divesh
Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from
Delhi and can be contacted at csdiveshgoyal@gmail.com)
Disclaimer: The entire contents of this
document have been prepared on the basis of relevant provisions and as per
the information existing at the time of the preparation. Although care has
been taken to ensure the accuracy, completeness and reliability of the
information provided, I assume no responsibility therefore. Users of this
information are expected to refer to the relevant existing provisions of
applicable Laws. The user of the information agrees that the information is
not a professional advice and is subject to change without notice. I assume
no responsibility for the consequences of use of such information. IN NO
EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR
INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE
USE OF THE INFORMATION.
This is only a
knowledge sharing initiative and author does not intend to solicit any
business or profession.
|
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