Annual Return Filing Guide for Pvt Limited Companies
After the conclusion of each financial year, all firms—private limited companies (PLCs), limited companies, and one-person enterprises—are required to file annual returns. A financial professional can complete the yearly return filing process for a PLC because it is so straightforward.
Importance of a Private Company Annual Filing
A PLC must file the audited financial statements with the registrar when the annual general meeting (AGM) is over and the PLC has approved them. The submission of the PLC’s annual return to the Ministry of Corporate Affairs (MCA) entails submitting the PLC’s audited financial statements in the required format.
Key Takeaways
- Annual return filing is mandatory for all firms, including private limited companies, limited companies, and one-person enterprises.
- Filing audited financial statements and annual returns is crucial for a private limited company’s compliance with the Ministry of Corporate Affairs (MCA).
- Key legal obligations for a private limited company include maintaining books of accounts, appointing an auditor, conducting annual general meetings (AGMs), and filing annual returns.
- The annual return includes information such as share capital, debt, directors, shareholders, corporate governance disclosures, and ownership details.
- Timely filing of annual returns is essential to avoid penalties, and non-filing can result in substantial fines and imprisonment for company officers.
- Filing a private limited company’s annual return involves registering on the MCA portal, completing e-forms, attaching required documents, and making the necessary payment.
Legal Requirements and Obligations
Let’s keep in mind the compliance actions that each PLC is required to take:
Maintain books of accounts
Companies are required to keep their books of accounts in a specified format under the 2013 Companies Act.
The following data must be present in all corporate accounts:
- A thorough accounting of all funds received and expended by the business;
- A list of all purchases and sales;
- A breakdown of the current assets and liabilities; and
- Any further financial transactions, including paying salaries.
Appointing an auditor
The hiring of a first auditor is a crucial need for effective compliance. Each must name its first auditor within a month of the company’s registration.
Any competent chartered accountant (CA) or group of CAs may be chosen to serve as the PLC’s auditor. An auditor’s appointment expires after the company’s initial annual general meeting (AGM). The business may appoint the same auditor again.
When an audit is finished, the auditor creates an audit report outlining their findings and offering an opinion. The auditor’s job is to ensure that the data in the financial report, taken as a whole, appropriately depicts the organization’s financial situation in a particular year. Auditors must follow the auditing criteria required by the Indian government to analyze the financial report.
Conducting annual general meetings
AGMs are required by the Companies Act of 2013, except for one-person businesses, which are not required to hold them yearly.
At the AGM, the company’s directors deliver an annual report to shareholders that details the company’s operations and business strategy.
Filing of annual returns
The returns must be submitted to the registrar when the AGM is over, and the firm has adopted the audited financial statements. Within 60 days of the date of the AGM, these returns must be filed.
Understanding the Annual Return
Contents of the annual return
A company’s share capital, debt, directors, shareholders, changes in dictatorships, corporate governance disclosures, and other information are all included in an annual return. Every company must prepare and file an annual return with the registrar each financial year by November 29th, according to the rules of the Companies Act 2013.
The following information must appear in a company’s annual report:
- Private Limited Company Registration information
- Information about the registered office of the business
- Principal commercial ventures that the corporation pursues
- Information about owning, affiliated, and subsidiary firms
- Information on the company’s shares, debentures, and other securities
- Information about the company’s net worth and revenue
- Information about shareholding patterns
- Indebtedness
- Information on the members, debenture holders, and holders of other securities
- Information on share or bond transfers for the specific fiscal year
- Specifics of the promoters
- Directors’ specifics
- Details about the important managerial persons
- Information on board meetings for members, classes of members, the board, and committees
- Salaries for directors
- Compensation for important managerial personnel
- Information on the fines, penalties, or compounding of violations for the firm, the directors, and other defaulting officers
- Information on issues with certification of compliances and disclosure
- Information about the shares held by the foreign institutional investor or on its behalf
Difference between annual return and financial statements
The financial statements must be delivered to the general meeting at least once per calendar year, beginning no later than 18 months following the company’s establishment.
Within 28 days of its drafting date, the annual return is completed up to the company’s reference date and delivered for filing to the Registrar of Companies along with the financial statements.
Timelines
The due date for a PLC’s annual return
Within 60 days of the AGM date, a firm must submit its annual return to the MCA. All corporations must hold an AGM within six months of the end of the fiscal year. As a result, the final date for holding the AGM would be September 30, and the deadline for submitting the annual report would be November 29.
If a company is unable to hold an AGM in any given year, the annual return must still be filed within 60 days of the date the AGM should have been held, along with a statement outlining the reasons why the AGM was unable to be held. As a result, a firm cannot use the argument that the AGM was not held to avoid completing an annual return.
Consequences of late or non-filing
If a corporation submits its annual report more than 60 days after the AGM or after November 29th, a penalty will be assessed for both the event’s date and the filing date.
The penalty for failing to file an organization’s yearly return is very substantial. Each firm officer who fails to file their annual report is subject to a punishment of at least Rs. 50,000 but not less than Rs. 5 lakhs, imprisonment, and a fine of at least Rs. 50,000 but not less than Rs. 5 lakhs for the company.
Preparation and compilation of information
Financial statements and supporting documents
Each corporation must include the following papers with its yearly return:
- Documents like balance sheets, profit and loss statements, and annual returns
- Documents from a cost audit, if applicable
The following forms must be on hand for private businesses formed under the Companies Act of 2013 or the Companies Act of 1956 to easily submit their annual reports to the Registrar of Companies:
- Form 23AC: This balance sheet submission form suits all kinds of businesses.
- Form 23ACA: This document is necessary to submit a profit and loss statement.
- Form 23AC-XBRL is necessary to submit balance sheets in XBRL format.
- Form 23ACA-XBRL: This is necessary to file the profit & loss account and is appropriate for a certain class of enterprises.
- Form 20B: Businesses that hold share capital must file this form with their yearly return.
- Form 66: This is needed to provide a compliance certificate for businesses that have paid capital between Rs. 10 lakhs and Rs. 5 crores.
- Form 21A: Organizations that do not own any share capital must file their annual returns using this form.
- Form AOC-4: Financial statements and other documentation must be submitted using this form for a specific category.
- Form AOC4-CFS: This form is needed to submit a statement summarising a group’s consolidated financial statement.
- Financial statements and documents in XBRL format must be filed using Form AOC4-XBRL.
- Form MGT-7: All businesses must submit this form annually in annual reports.
Steps to File a Private Limited Company Annual Return
Registering and accessing the MCA portal
The steps for filing the yearly return online are as follows:
- Go to the MCA website at www.mca.gov.in, pick MCA services from the menu, then click “e-filing and Company Forms” to download. Download the MGT-7 and AOC-4 documents.
- Choose the e-forms that apply to your business, complete them, attach the required PDF or XML documents, and sign them electronically with the director’s signature and the person in charge.
- Doing so will allow you to register your business as a business user on the MCA portal. Following this process, you will register as a user on MCA and be able to log in using your ID and password.
- Submit the annual return for your business by logging into the website. Upload all required e-forms and signed documents from any location using the Internet.
- After all the documents or electronic forms have been uploaded, the system will immediately produce a service request number and present payment alternatives.
Conclusion
The requirement that every firm files its annual return is a crucial consideration. All business parties must follow the 2013 Companies Act’s provisions. Entrepreneurs must also be constantly aware of their responsibilities and submit their yearly returns by the deadline.
If you need assistance in this area, contact Govche India Pvt. Ltd.’s web portal, Kanakkupillai.com, in Chennai. If you are unfamiliar with the compliance and annual filing processes, they can help you manage your annual return filing process and provide the best accounting and business compliance services.
