Guide and Procedure of Annual Return Filing for Companies

Filing Annual Returns for Companies

Companies including Private limited companies, Limited Liability Companies, One Person Companies, and Section 8 companies registered in India are required to file an annual return every year with MCA. The main aim of filing annual returns for the company is to confirm that the company is still active in the market or business/trading or that the business will commence in the near future. If a company has not filed its Annual Return with MCA for three consecutive fiscal years, then the director of that company can be disqualified under the Companies Act, 2013 which also leads to various penalties and punishments.

It is a must that the company should acquit an Annual General Meeting at the end of every fiscal year, before filing the annual return. The Annual General Meeting of the newly integrated Companies should be held within 18 months from the date of incorporation. The financial year starts on April 1st and ends on 31st March. Subsequent AGM shall be held at the earliest of the following dates:

1. 15 months from the date of the previous AGM
2. Last day of the calendar year i.e December 31st
3. 6 months from the end of the Financial Year

Furthermore, with MCA annual return, the companies are required to File income tax returns regardless of income, loss, or profit. Therefore, even abeyant companies with no business deals or trades are required to file income tax returns every year. 

What is Annual Return?

The annual return is the yearly statement containing essential information about an entity’s composition, activities, and financial position. Not to mention, every active company registered with an appropriate authority needs to file Annual Return at the end of every fiscal year.

All companies (private limited company, one-person company, limited company, section 8 company, etc) are required to file an annual return with the MCA every year. In addition to filing MCA annual returns, companies would also be required to file income tax returns.

Information contained in Company’s Annual Report

When the Company files its annual return, the Registrar is given the following information:

• The company’s registered headquarters
• Principal commercial pursuits of the firm
• Associate or Filial Businesses
• Shares, bonds, and other types of assets
• Holdings of Shares
• Producer, director, and key managerial personnel loan information
• Update of Members’ List
• Penalty meted out to the business or its directors
• Disclosures of any relevant information

The procedure of Annual Return Filing

The procedure of Annual return filing for companies can be easily understood by the following process:

1. Conduct a Board Meeting to

• Appoint an auditor to research and prepare the financial statements according to Schedule III of the Companies Act, 2013.
• The Director or the Secretary of the company should prepare the Board Report and Annual Return as per the Companies Act, 2013.

2. Conduct another Board Meeting to approve the draft of financial statements of the company, Board Report, and Annual Return must be prepared or supervised by the directors of the company.
3. Hold the Annual General Meeting and authorize the necessary declarations of the company. 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.

Documents Required for Annual Filing

Every company while filing an annual return, has to attach the following documents  

• Balance-Sheet documents
• Profit & Loss Account documents
• Annual Return documents
• Cost Audit Report documents if applicable

The private companies incorporated under the Companies Act 2013 or Companies Act 1956 are required to have the following forms to file annual returns with the Registrar of Companies (ROC) without any problem:

• Form 23AC: This form is applicable for all types of companies and it is used to file Balance Sheet 
• Form 23ACA: This form is required to file Profit & Loss Account
• Form 23AC-XBRL: This form is required to file Balance Sheet in XBRL format
• Form 23ACA-XBRL: This is applicable for a selected class of companies and it is required to file the Profit & Loss Account 
• Form 20B: This form is required to file  Annual Return by Companies that hold share capital
• Form 66: This form is required to file Compliance Certificate for Companies that have paid capital of Rs. 10 lakh – Rs. 5 crore
• Form 21 A: This form is required to file Annual Return by Companies that do not hold any share capital
• Form AOC-4: This form is required to file financial statements and other documents for certain category 
• Form AOC4- CFS: This form is required to file a statement that contains salient features of the consolidated financial statement of a group 
• Form AOC4-XBRL: This form is required to file financial statements and other documents in XBRL format
• Form MGT-7: This form is required to file Annual Returns by all Companies 

How to File Annual Returns of Company Online 

Filing annual returns for the company is made easy by the e-filing process. Here is the procedure to file the annual return online, just have a glance:

1. Visit the MCA website www.mca.gov.in, click the MCA services menu and select E-filing from the menu and click Company Forms to download. Download the AOC-4 and MGT-7 forms.
2. Select the E-forms applicable to your company, fill in all the needed details, and attach pdf or XML documents according to requirements, attach the Digital Signature of the Director and the professional who is in charge currently.
3. In this way, register your company on the MCA portal as a Business User. After this procedure, you will become a registered user on MCA and you can log in with your ID and password.
4. Now file your company’s annual return, by logging into the website. Upload all needed E-forms and signed forms from anywhere using the internet.
5. After uploading all the documents or E-forms, the system will generate a Service Request Number (SRN) automatically and also provide options for payment. There are two options for payments

• Pay using a debit/credit card or internet banking and save the payment challan for further reference
• Pay Later and save the challan generated, here you have to pay the due time

6. After completing the process, you can track the status of transactions from anywhere using SRN under the MCA services menu.

Due Date for Filing the Company’s Annual Return

A company’s annual return must be filed within sixty days of the date of its annual public meeting. In the event of a company’s first year of operations, the Annual General Meeting must be held within 9 months of the closing of its accounts. In the second year, the Annual General Meeting must be conducted within 6 months of the Company’s fiscal year-end.

NIL Annual Return Filing

The Company is required to submit an annual return even if the Company is not operating and there are no transactions. To lessen the burden of compliance, a business may be able to apply for and be granted dormant status.

Penalty for Not Filing the Company’s Annual Return

The fine for not filing a company’s annual return is very high. A company that fails to submit its annual report is subject to a fine of at least Rs. 50,000 but not less than Rs. 5 lakhs, and each officer of the company is subject to a fine of at least Rs. 50,000 but not less than Rs. 5 lakhs and imprisonment.

Conclusion

Every business must file an annual return, which is a significant factor. All business stakeholders must follow the rules established by the Companies Act of 2013. Additionally, it is crucial for every entrepreneur to remain conscious of their obligations and should submit their yearly return before the deadline. A few documents are needed to file the annual report, including balance sheets, previous years’ tax returns, and cost audit reports for the specific company. Account documents that show the company’s profit and loss are also necessary.

Kanakkupillai can offer you the best accounting and business compliance services and assist you in managing your annual return filing process if you are new to the compliance & annual filing processes.