All about ROC Annual Return & Forms MGT-7, MGT-8 and AOC-4

Annual Return

Every company registered under the Companies Act 1956 / 2013 is required to file Annual returns with the Ministry of Corporate Affairs (MCA) / registrar of companies (ROC) on annual basis. These yearly filings are mandatory for every registered Company whether the Company carries on business or not.

Every company registered under Companies Act, whether small, one-person company, private limited or public limited are required to file their Annual Returns with the registrar of companies annually to keep themselves updated about the working and management of the company. Annual Return contains the basic information related to company, its shareholders, directors etc. as on the last day of the financial year i.e. 31st March.

Annual return is governed under Section 92 of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014. Annual Return compliance for registered Companies in India under the Companies Act 1956 / 2013, is necessary. Irrespective of the total turnover or the capital amount, the company must comply with the Annual Return compliance requirement. Delay or non – filing of ROC Annual Return attracts heavy interest, penalties and delayed fee on per day basis.

Annual Return – Overview

Annual Return (Form MGT-7)

Annual Return under Companies Act is a yearly Return containing the general particulars of the company on the close of the financial year such as details of its registered office, business activities, particulars of its holding, subsidiary companies, shares, debentures and other securities and shareholding pattern, members and debenture-holders along with changes therein, promoters, directors, key managerial personnel along with changes therein, meetings of members or a class thereof, Board and its various committees along with attendance details, remuneration of directors and key managerial personnel, penalty or punishment imposed on the company, matters relating to certification of compliances, disclosures etc.

Purpose of the e-Form MGT-7?

Every company shall prepare an annual return in the form MGT-7 containing the particulars as they stood on the close of the financial year. These details include details regarding:-

• The registered office, principal business activities, particulars of its holding, subsidiary and associate companies;
• The shares, debentures, other securities and shareholding pattern of the company;
• Indebtedness of the company;
• The members and debenture-holders along with alterations connected to them since the end of the previous financial year;
• The promoters, directors, key managerial personnel along with alterations connected to them since the close of the previous financial year;
• Meetings of members or a class thereof, Board and its various committees along with attendance details;
• Remuneration of directors and key managerial personnel;
• Penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or punishment;
• The matters relating to certification of compliances and disclosures as may be prescribed;
• Its Shareholding pattern; and
• Such other matters as required in the form.
• Which are the attachments required to file this form?
• This e-form can be filled by attaching the scanned copy of documents under the attachments head. This is at the end of the form.
• The attachments required include:-
• List of shareholders, debenture holders
• Approval letter for extension of AGM;
• Copy of MGT-8;
• Optional Attachment(s), if any

MGT – 7A: An Abridged form of Annual Return

The Central Government has prescribed an abridged form of annual return i.e. MGT-7A, for “OPC and Small Company” by amending the provisions of Companies (Management and Administration) Rules, 2014 which shall come into force from 05th March, 2021. This form is applicable in respect of Annual Return for the F.Y. 2020-21 and onwards of OPC and small companies.

• One Person Company (OPC):

As per Section 2(62) of Companies Act, 2013, “One Person Company” means a company which has only one person as member.

• Small Company:

According to Section 2(85) of Companies Act, 2013, A Public Company shall not be considered as a ‘Small Company’.

A company other than public company shall be considered as a ‘Small Company’ if it satisfies both the conditions given below:

(a) Paid up share capital of the company does not exceed Rs. 2 crores or such higher amount as may be prescribed which shall not be more than Rs. 10 crores and

(b) Turnover as per P&L Account for the immediately preceding financial year does not exceed Rs. 20 crores or such higher amount as may be prescribed which shall not be more than Rs. 100 crores.

Provided that: Nothing in this clause shall apply to-

(a) A Holding company or a subsidiary company
(b) A company registered under section 8 of the Companies Act
(c) A company or body corporate governed by any special Act

Form MGT-7A requires lesser information as compared to MGT-7. Following information are not applicable in case of MGT-7A:

• Date of AGM
• Particulars of Associate companies like holding or subsidiary (including joint ventures)
• Details of unclassified share capital
• Break-up of share capital
• Details of Shares or Debenture transfer
• Shareholding pattern (promoter/ non-promoter)
• Member/ other meeting details
• Details of board meeting
• Attendance of directors

Form MGT-8: Certificate by a Company Secretary in Practice

Form MGT-8 is a certification given on a company’s annual return by a practising company secretary, as per the Companies Act 2013, under Section 92(2) read with rule 11(2) of Companies (Management and Administration) Rules, 2014. MGT 8 is to be attached by a listed company or a company having paid-up share capital of 10 crore rupees or more or turnover of 50 crore rupees or more, shall be certified by a Company Secretary in practice (PCS) and the certificate shall be given in prescribed Form No. MGT-8. If date of MGT 8 is disclosed after October 01, 2020 then UDIN shall be generated by practicing Company Secretary (PCS).

Timeline for Company Annual Return Filing

1. Due date for Annual Return (MGT-7A): OPC does not require to hold AGM, yet the due date for filing Form MGT 7A shall be 60 days from the completion of the 6 months from the end of financial year. One Person Company (OPC) and Small Company shall file its annual return from the FY 2020-21 onwards in Form no- MGT-7A

2. Form MGT-7A is the form prescribed for Annual Return of all the Companies, except One Person Company (OPC) and Small companies. The same shall be filed with the Registrar of the Companies within 60 days from the conclusion of AGM (including event date).

Annual Return Checklist:

GENERAL PROCEDURE OF ANNUAL RETURN FILING

1. Prepare Notice, Agenda, Notes to Agenda and documents related to Annual general Meeting (AGM)

2. Conduct a Board Meeting and pass the necessary resolutions

3. Appoint an auditor to research and prepare the financial statements according to Schedule III of the Companies Act, 2013.

4. The Director or the Company Secretary of the company should prepare the Board Report and Annual Return and other necessary documents as per the provisions of the Companies Act, 2013.

5. Conduct another Board Meeting to approve the draft of financial statements of the company, Board Report and Annual Return must be prepared / reviewed by the directors of the company.

6. Hold the Annual General meeting (AGM). The financial statements of the company are considered to be final, only when those documents are approved by the shareholders at the Annual General Meeting.

7. Prepare necessary documents for Annual Return Filings.

FAQ’s Segment:

FAQ’s on Annual Return:

Q1. Who has to file the Annual Return?

a) MGT – 7: All companies, except OPC and Small Company, whether public or private which are registered in India must file the Form MGT-7 every year.

b) MGT-7A: OPC and Small Company which are registered in India must file the Form MGT-7A every year from this FY onwards.

Q2. What is the due date of filing this form MGT-7?

Form MGT-7 is to be filed by every Company, except OPC, within 60 days from the date of conclusion of Annual General Meeting (AGM) of the company.

OPC does not require to hold AGM, yet the due date for filing Form MGT 7 shall be 60 days from the completion of the 6 months from the end of financial year, that means due date will be 60th day from 27.09.2021.

Q3. Any extension for Annual Return Filing for FY 2020-21?

Due to amidst 2nd wave of corona virus (COVID-19), the Ministry of Corporate Affairs (MCA) has extended the due date for holding annual general meetings (AGMs) for the financial year 2020-21 by two months i.e. till November, 2021 end.

This extension would mean that companies now have time till the end of November 2021 to hold the AGM.

Therefore, the last date for filing form MGT-7 and MGT-7A for 2020-21 is also extended.

Q4. Our company is a small company, do we still have to file MGT-7?

No, MGT-7A is to be filed by every small companies as per section 92, from this FY 2020-21 onwards.

Q5. We have a Private Limited Company, however we don’t carry any business in it since years. Do we still need to file annual return?

MGT-7 is required to file the Annual return in the prescribed forms MGT -7 / MGT 7A (if OPC or small Company), as the case may be, till the status of the company is ‘active ‘. Once you obtain a ‘dormant status’ then you need not file.

Q6. My company has not filed annual return for last 2 years, can we file for both the years?

Yes, you can file for both the years by making payment of additional fees @ Rs. 100 per day.

Q7. Who can sign annual Return?

Under section 92 of the Companies Act 2013, the Annual return (form MGT -7) is required to be signed both by the Director and the Company Secretary, in case there is no Company Secretary PCS can sign.

The Annual Return of One Person Company and Small Company in Form MGT-7A, shall be signed by the director of the company.

Q8. Can Disqualified Director sign the Annual Return form?

Disqualified Director should not sign the form.

Q9. What are the consequences of non-filing the form?

The penalty for not filing an annual return has been remarkably increased in 2018 to Rs. 100 (Rupees Hundred) per day of default. Hence, it should be ensured that the annual return in this form is filed before the due date.

Q10. Form Processing Type?

The e-Form will be processed in STP mode.

Due date of filing Annual Return if AGM not held:

If the Annual General Meeting is not held in any year, the return has to be filed within 60 days from the date on which Annual General Meeting should have been held together with the statement specifying the reasons for not holding the Annual General Meeting, on payment of such fee or additional fee under section 403.

Key Points – We must know:

• Preparation of Annual Financial Accounts and Annual Return, both are mandatory for every Company in accordance with the applicable provisions of Law.
• Every Company has to get the accounts audited by a Chartered Accountant in Practice (Auditor of the Company).
• Every Company has to file Form AOC-4 and MGT-7 & MGT-7A, as the case may be, with ROC every year, even if the Company is not carrying on any business.
• Delay in filing Form AOC4 and MGT -7 & MGT- 7A will attract an additional fee / Penalty of Rs.100 per day (fixed) till the date of filing completed.
• Non-Filing of Accounts and Annual Return for more than 2 consecutive years would result in Closure of Company by ROC. Such companies would be termed as an “inactive company”.
• Non-Filing of Accounts and Annual Return for more than 3 years will result in Disqualification of Directors u/s 164 of Companies Act.
• The Directors of a company are responsible for ensuring that the company complies with all applicable rules and regulations.
• It is urgent and most important to file all your pending returns and forms as early as possible.

Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Every effort has been made to keep the information cited in this article error-free. Suggestions and feedback to improve the task are welcome. The article and opinions therein are based on our understanding of the law and provisions prevailing as on date. The contents of this article are for information purposes only and does not constitute an advice or a legal opinion and are personal views of the author. The opinion may vary according to one’s interpretation of the law. It should not be relied upon as the sole basis for any decision which may affect you or your business. The authors can be approached at [email protected] and / [email protected]