Implications of Failing to Submit Annual Returns to the Registrar of Companies

Entities established under the Companies Act of 1956 or the Companies Act of 2013 are mandated to submit their annual returns, specifically forms AOC-4, MGT-7/MGT-7A, and MGT-14, to the Registrar of Companies (ROC) and file Income Tax Returns (ITR) with the Income Tax Department for each fiscal year. The deadlines for the submission of annual returns are as follows:

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• Form AOC-4: Companies must submit Form AOC-4 alongside their financial statements, consolidated financial statements if applicable, the notice of the Annual General Meeting (AGM), and the Director's Report to the Registrar within 30 days following the AGM (which is held by 30 September, barring the first AGM), accompanied by the standard fee.
• Form MGT-7/MGT-7A: Companies are required to submit their annual returns using Form MGT-7/MGT-7A to the Registrar within 60 days of their AGM (also by 30 September, except for the first AGM), along with the standard fee.
• Form MGT-14: In accordance with Section 179(3) clause g, every public company must file Form MGT-14 for the adoption and approval of financial statements and the Board Report within 30 days of the resolution being passed.

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Implications for Non-compliance by Companies:

Failing to submit annual returns punctually will result in the imposition of an additional fee of INR 100 per day, per form, for submissions made after the due date. Should a company persistently neglect to file annual returns for two consecutive fiscal years without applying for dormant status within this timeframe, the Registrar may initiate proceedings to strike off (close) the company.

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Implications for Directors:

Directors of a company that fails to submit annual returns for three consecutive fiscal years will face disqualification for a period of five years, rendering them ineligible for appointment or reappointment as directors in any other company.

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Remedial Measures:

To maintain compliance and support business expansion, companies should ensure the timely submission of all returns. If delays occur, companies can still submit their returns alongside an additional fee of INR 100 per day, even after receiving a notice from the Registrar, by presenting a formal response to the notice. Companies without business activities or those that have not commenced operations should consider applying for company closure using Form STK-2 before receiving a notice from the Registrar, to circumvent director disqualification and other legal repercussions from the ROC

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