Section 92. Annual return under the companies act 2013

Running a company in India involves various responsibilities, and staying compliant with legal requirements is paramount. Among the most crucial annual tasks is filing the company’s Annual Return. This isn’t just paperwork; it’s a mandatory declaration under the law that reflects your company’s health and activities throughout the financial year. Understanding Section 92 of the Companies Act, 2013, which governs this process, is essential for every registered company. Failing to grasp the requirements of the annual return under the companies act 2013 can lead to significant penalties and jeopardize your company’s standing. This filing ensures transparency for stakeholders and allows regulatory bodies like the Registrar of Companies (ROC) to maintain oversight. For small business owners and individuals serving as directors or shareholders, understanding this compliance requirement is vital for maintaining the company’s active status and avoiding unnecessary legal trouble.

Understanding Section 92: The Basics

Section 92 of the Companies Act, 2013, serves a clear purpose: it mandates every company registered in India to prepare and file an Annual Return with the Registrar of Companies (ROC). Think of it as an annual report card submitted to the government, providing a comprehensive summary of the company’s key information and activities as they stood at the close of the financial year (usually March 31st). This requirement isn’t optional; it’s a fundamental legal obligation. Fulfilling this duty is a core part of overall compliance with companies act 2013 in India. The objective is to ensure that updated, accurate information about the company’s structure, management, financial position (specifically indebtedness), and shareholding is available on public record, promoting corporate transparency and accountability.

What is an Annual Return (Form MGT-7 / MGT-7A)?

The Annual Return is a specific form containing prescribed particulars about the company for a given financial year. It’s crucial to understand that this Annual Return filed with the Ministry of Corporate Affairs (MCA) is entirely different from the Income Tax Return (ITR) that your company files with the Income Tax Department. While the ITR focuses on income computation and tax liability, the Annual Return provides a broader snapshot of the company’s corporate structure and compliance status under company law.

The Companies Act, 2013 specifies two main forms for the Annual Return:

Form MGT-7: This is the detailed Annual Return applicable to most types of companies, including Private Limited Companies and Public Limited Companies.
Form MGT-7A: This is a simplified, abridged Annual Return introduced for the ease of compliance for One Person Companies (OPCs) and Small Companies. A ‘Small Company’ (as defined under Section 2(85) of the Act, subject to prescribed thresholds) is generally a private company with a paid-up share capital and turnover below certain limits specified by the government, which are revised from time to time.

Understanding which form applies to your company is the first step in fulfilling the companies act annual return requirements.

Key Contents of the Annual Return: What Information is Required?

The Annual Return, particularly Form MGT-7, requires a substantial amount of detailed information, ensuring a comprehensive overview of the company’s affairs for the financial year. These details are mandated by Section 92(1) and associated rules, forming the core of the companies act annual return requirements. Key particulars include:

Basic Company Information: Details of the registered office, principal business activities, and particulars of any holding, subsidiary, and associate companies.
Capital Structure: Information regarding shares, debentures, and other securities, along with the complete shareholding pattern of the company.
Financial Status: Details about the company’s indebtedness as of the financial year-end.
Membership & Debenture Holders: Particulars of members and debenture-holders, including any changes that occurred since the end of the previous financial year.
Management: Details of promoters, directors, and Key Managerial Personnel (KMP), along with any changes in their positions during the year.
Corporate Governance: Information on meetings held during the year – including meetings of members (or specific classes), the Board of Directors, and its various committees, along with attendance records.
Remuneration: Details regarding the remuneration paid to directors and KMP.
Compliance & Penalties: Information about any penalty or punishment imposed on the company, its directors, or officers, and details related to the certification of compliances and disclosures made.
Foreign Investment: Details of shares held by or on behalf of Foreign Institutional Investors (FIIs), indicating their name, address, country of incorporation, registration, and percentage of shareholding.
Other Prescribed Matters: Any other information as may be required by the specific form or rules notified by the MCA.

Form MGT-7A requires similar information but in a more condensed format suitable for OPCs and Small Companies.

Who Needs to File the Annual Return?

The requirement to file an Annual Return under Section 92 is universal for companies incorporated in India. Every company registered under the Companies Act, 2013, or any previous company law, must file an Annual Return every year. This includes:

Private Limited Companies
Public Limited Companies
One Person Companies (OPCs)
Section 8 Companies (companies formed for charitable objects)
Producer Companies
Even companies that may have been dormant or had no business activity during the financial year must file their Annual Return until they are formally struck off the register or liquidated.

The only difference lies in the form used (MGT-7 or MGT-7A), based on whether the company qualifies as an OPC or a Small Company. There are generally no exemptions from the filing requirement itself.

Due Date for Filing the Annual Return

Timeliness is critical when it comes to compliance. Section 92(4) clearly specifies the due date for filing the Annual Return. It must be filed with the Registrar of Companies (ROC) within sixty days (60 days) from the date on which the Annual General Meeting (AGM) is actually held OR the last day on which the AGM should have been held as per the provisions of the Act, whichever date is earlier.

To understand this better:

AGM Requirement: Every company (except OPCs) is required to hold an AGM once every calendar year. The gap between two AGMs should not exceed 15 months. Importantly, the AGM for a financial year must be held within six months from the end of that financial year (Section 96). For a financial year ending on March 31st, the AGM must generally be held by September 30th of the same calendar year.
Calculating the Due Date: If a company holds its AGM on September 30th, the Annual Return must be filed within 60 days from that date, i.e., by November 29th.
If AGM Not Held/Delayed: Even if the AGM is delayed or not held, the obligation to file the Annual Return remains. In such cases, the law mandates filing within 60 days from the last date the AGM should have been held (i.e., typically 60 days from September 30th, making the due date November 29th).

Adhering to this deadline is essential for smooth annual return filing companies act India.

The Filing Process: Step-by-Step Guide

The annual return process for companies in India is done electronically through the Ministry of Corporate Affairs (MCA) portal. Here’s a simplified step-by-step guide to navigating the filing annual return under companies act 2013:

Prepare the Draft Annual Return: Gather all the required information as listed under the ‘Key Contents’ section above. Accurately compile these details into the applicable e-Form (MGT-7 or MGT-7A). These forms can be downloaded from the MCA website. Ensure all data pertains to the correct financial year.
Board Approval: Once the draft Annual Return is ready, convene a Board Meeting. The Directors must discuss and formally approve the Annual Return before it can be signed and filed. This approval should be recorded in the minutes of the Board Meeting.
Signing the Form: The Annual Return must be signed digitally (using a Digital Signature Certificate – DSC).
- For most companies (filing MGT-7): It must be signed by one Director and the Company Secretary (CS) of the company. If the company doesn’t have a CS, it can be signed by a Company Secretary in Practice (PCS).
- For OPCs and Small Companies (filing MGT-7A): It can be signed by the Company Secretary, or where there is no Company Secretary, by a single Director of the company.
Certification (Where Applicable): For certain companies, the Annual Return (Form MGT-7) needs to be certified by a Practicing Company Secretary (PCS) by way of signing Form MGT-8. This certification attests that the company has complied with the provisions of the Companies Act. Certification is mandatory for:
- All Listed Companies.
- Every Public Company having a paid-up share capital of ₹10 Crore or more OR turnover of ₹50 Crore or more.
- Every Private Company having a paid-up share capital of ₹10 Crore or more AND turnover of ₹50 Crore or more (thresholds as per current rules, subject to change).
(Note: Form MGT-7A for OPCs and Small Companies does not require PCS certification).
Filing the e-Form with ROC: Once signed (and certified, if required), the completed e-Form MGT-7 or MGT-7A must be uploaded electronically on the MCA portal (https://www.mca.gov.in/). This is the formal filing step.
Payment of Applicable Fees: Statutory filing fees must be paid online during the e-filing process. The fee amount depends on the authorized share capital of the company. Delay in filing attracts additional fees (late fees).

Following these steps diligently ensures proper filing annual return under companies act 2013.

Consequences of Non-Filing or Delay

The Companies Act, 2013 takes the filing of the Annual Return very seriously. Non-compliance, either by failing to file or by filing late, attracts significant penalties and can have severe repercussions for the company and its officers. Ignoring this requirement is detrimental to ensuring compliance with companies act 2013 in India.

Penalties under Section 92(5):

If a company fails to file its Annual Return (Form MGT-7/MGT-7A) within the stipulated 60-day period, the following penalties apply:

Penalty on the Company: A penalty of Fifty Thousand Rupees (₹50,000) is levied.
Penalty for Continuing Failure: In case the failure continues, a further penalty of One Hundred Rupees (₹100) for each day during which the failure continues is imposed, subject to a maximum penalty of Five Lakh Rupees (₹5,00,000).
Penalty on Officers in Default: Every officer of the company who is in default (this typically includes Directors and the Company Secretary) shall also be liable to a penalty. The penalty structure is the same as for the company: Fifty Thousand Rupees (₹50,000), and in case of continuing failure, a further penalty of One Hundred Rupees (₹100) per day, subject to a maximum of Five Lakh Rupees (₹5,00,000).

These monetary penalties can add up quickly, especially if the delay is prolonged.

Other Significant Consequences:

Beyond the direct financial penalties, non-compliance can lead to:

Additional Fees: Late filing invariably attracts additional government fees, which increase based on the period of delay.
Company Status: Persistent failure to file Annual Returns (along with financial statements) can lead the ROC to believe the company is not carrying on any business or operation. The ROC may then initiate action to strike the company’s name off the Register of Companies after issuing appropriate notices.
Director Disqualification: Directors of companies that have failed to file annual returns for three consecutive financial years may face disqualification under Section 164(2) of the Act, barring them from being appointed or reappointed as directors in any company for five years.
Reputational Damage: Non-compliance reflects poorly on the company’s governance standards, potentially impacting its ability to attract investors, secure loans from banks or financial institutions, or participate in tenders.
Operational Hurdles: A company marked as non-compliant may face difficulties in undertaking various corporate actions or getting approvals from regulatory authorities.

Conclusion

Filing the Annual Return is a non-negotiable aspect of corporate compliance in India. As mandated by Section 92, preparing and submitting Form MGT-7 or MGT-7A accurately and within the specified deadline is crucial. This return provides a vital annual update on the company’s structure, management, and key activities to the ROC and the public. Understanding the contents, applicability, due dates (within 60 days of AGM or its due date), and the step-by-step filing process is essential for every director and shareholder.

More importantly, recognizing the severe consequences of non-compliance – including hefty penalties for both the company and its officers, potential director disqualification, and even the risk of the company being struck off – underscores the significance of timely filing of the annual return under the companies act 2013. It’s fundamental to maintaining good legal standing, ensuring transparency, and safeguarding the company’s future.

If navigating the complexities of annual return filing companies act India seems daunting, or if you need assistance ensuring your company meets all its compliance obligations under the Companies Act, 2013, don’t hesitate to seek professional help. TaxRobo offers expert Company Annual Compliance Services to ensure your filings are accurate, timely, and hassle-free. Contact us today for peace of mind.

Frequently Asked Questions (FAQs)

Q1: What is the difference between Form MGT-7 and MGT-7A?

Answer: Form MGT-7 is the standard, detailed Annual Return form applicable to most companies, including Private Limited and Public Limited companies. Form MGT-7A is a shorter, abridged version designed specifically for One Person Companies (OPCs) and Small Companies (as defined by the Companies Act based on paid-up capital and turnover thresholds), simplifying their compliance burden.

Q2: Is filing the Annual Return mandatory even if my company had no business activity during the year?

Answer: Yes, filing the Annual Return (MGT-7/MGT-7A) is absolutely mandatory for all registered companies, regardless of their business activity level during the financial year. Even if the company was dormant or generated zero revenue, the Annual Return must be filed every year until the company is formally struck off the Register of Companies or undergoes liquidation. Failure to file can lead to penalties and other adverse consequences.

Q3: What happens if the Annual General Meeting (AGM) is not held on time?

Answer: The duty to file the Annual Return is linked to the AGM date or the last date the AGM should have been held. Therefore, even if the AGM is delayed or not conducted, the Annual Return must still be filed within 60 days from the statutory due date for holding the AGM (which is typically September 30th for the financial year ending March 31st). Separately, failure to hold the AGM itself is a violation of Section 96 of the Companies Act, 2013, and attracts its own set of penalties.

Q4: Where can I find the official text of Section 92 of the Companies Act, 2013?

Answer: The official and most current text of the Companies Act, 2013, including Section 92, can be accessed on the website of the Ministry of Corporate Affairs (MCA). Look for the ‘Acts & Rules’ section or the ‘e-Book’ for the Companies Act, 2013 on the official portal: https://www.mca.gov.in/.

Q5: Can the due date for filing the annual return be extended?

Answer: The statutory due date for filing the Annual Return (60 days from the date of AGM or the last day the AGM should have been held) is generally fixed by law. While the Central Government has the power to grant extensions, this is usually done only under extraordinary circumstances affecting a large number of companies (e.g., during the peak of the COVID-19 pandemic) via specific circulars or notifications. Companies should not assume an extension will be granted and must plan to meet the regular statutory deadline (typically November 29th). Filing after the due date without a formal government extension will result in additional fees and penalties as per the Act.

Section 92.Annual return under the companies act 2013