IMPLICATION OF NON-FILING OF ANNUAL FORM – Companies Amendment Act, 2017
|
Series 307
|
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 Act, 2017 “hereafter referred as CAA-2017” has been
passed in Rajya Sabha there are many alteration/ modifications are prescribed
under the Act. One of the Major impacts of the CAA-2017 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 Act, 2017.
(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. 307 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 provision 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 200,000/- 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 Act, 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 than 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 of Research –
Side Effects of Companies
Amendment Act - 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 Act, 2017.
It can
be opine that, 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
Companies (Amendment) Act, 2017 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:
Alter
the method of additional fees on filing of e-form MGT-7 & AOC-4 as
mentioned above..
One
can be opine, 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:
If 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 non compliance of provision of Section 92 & 137
twice than 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.
Non-compliance
shall be trigger from 31st day and 61st day. Thus, one
can opine that due to CAA-2017, 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.
|
(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.
|
Comments
Post a Comment