The foundation of corporate governance in India is the Companies Act of 2013. The purpose of the act was to give companies a transparent and organised environment. The primary goal is to ensure that companies comply with the mandatory requirements before and after incorporation and operate with accountability, adhering to a robust regulatory framework. The act contains numerous statutory forms, and each form has a specific purpose of facilitating compliance, streamlining processes, and maintaining corporate integrity. These documents cover every stage of a business’s lifetime, including company incorporation, day-to-day management, financial reporting, structural modifications, and, if required, closure of the company.
These forms are not just essential to maintain compliance with statutory requirements, but the timely filing of these forms establishes and upholds credibility with the stakeholders, investors, and even the general public. The forms are important for big as well as small corporations. For new startups and small businesses, filing these forms can be a difficult task sometimes, and therefore, it is essential to have a clear idea about the meaning and purpose of the forms. In this guide, we will explore the meaning, purpose, and consequences of not filing the forms on time.
Purpose of the Forms
Forms in the Companies Act 2013 fulfil the below-mentioned purpose:
- Ensuring Compliance: These forms make sure businesses follow the laws established by the Indian parliament and fulfil their statutory obligations.
- Transparency: Since the majority of corporate operations are recorded and submitted to the statutory authority, forms help provide clarity and accessibility to stakeholders, including investors and regulators.
- Enabling Communication: Companies and regulatory agencies can communicate formally through forms. They guarantee prompt reporting of all important updates.
- Avoiding Penalties: Proper and timely filing of forms helps companies avoid fines, penalties, or legal actions.
- Maintaining Corporate Integrity: Forms help uphold a company’s reputation in the market.
Types of Forms Under the Companies Act, 2013
The forms in The Companies Act 2013 are categorized into different heads for better understanding, and they are as follows:
A. Incorporation and Registration Forms
1. SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus):
The SPICe+ form is a unified application used to incorporate a company in India. When a company is being incorporated, the SPICe+ form automatically allocates the company’s PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number), which are essential for tax reporting and compliance. The form also registers the company with GST (Goods and Services Tax Identification Number), EPFO (Employees’ Provident Fund Organization), and ESIC (Employees’ State Insurance Corporation). Additionally, the SPICe+ form facilitates the opening of a company’s bank account.
This form shall be the Ministry of Corporate Affairs (hereinafter referred to as MCA) portal. The promoters or their authorized representatives are responsible for submitting the form. Failure to file the SPICe+ form on time can result in delays in the incorporation process and penalties from RoC.
2. INC-9 (Declaration by Subscribers and First Directors):
The INC-9 form is a declaration filed during the company incorporation process. It confirms that the subscribers (those who agree to become members of the company) and the first directors have adhered to the legal and statutory requirements before the company can be registered. This includes verifying the identity and compliance of these individuals with the norms established under the Companies Act.
This form is filed through the MCA portal, and the subscribers and first directors are responsible for ensuring its accuracy. If false or incorrect information is provided in this form, it can lead to penalties under Section 448 of the Companies Act.
3. INC-22 (Notice of Situation or Change of Registered Office):
The INC-22 form is filed when a company needs to inform the Registrar of Companies (hereinafter referred to as RoC) about the location of its registered office or any changes to it.
This form must be submitted via the MCA portal, and it’s the responsibility of the company directors to file it. If the company fails to notify the RoC about its office location or any changes within the stipulated time frame, it can be penalized with a fine of Rs. 1,000 per day, up to a maximum of Rs. 1 lakh.
B. Annual Filing Forms
1. AOC-4 (Filing of Financial Statements):
The AOC-4 form is used to file financial statements, balance sheets, and profit and loss accounts with the Registrar. All companies must submit their annual financial statements within 30 days of the annual general meeting (AGM).
This form must be submitted on the MCA portal, and the company directors are responsible for ensuring its completion. Failure to file AOC-4 on time can attract a penalty of Rs. 100 per day for each day of delay and additional penalties may be imposed on both the company and its officers.
2. MGT-7 (Annual Return):
The MGT-7 form is an annual return containing detailed information about the shareholding pattern, board of directors, key managerial personnel (KMP), and other important details of the company. It is mandatory to file this form every year.
The form is filed through the MCA portal, and the responsibility for filing rests with the directors of the company to file the form. If this form is not submitted on time, a penalty of Rs. 100 per day will be levied, with no upper limit on the fine.
3. MGT-7A (Abridged Annual Return):
The MGT-7A form is a simplified version of the MGT-7 (Annual Return), which is designed for small companies and one-person companies (OPCs). This form is required to provide the RoC with a summary of key company information, including shareholding patterns, directors, and key managerial personnel.
This form must be filed through the MCA portal, and the company directors are responsible for ensuring its accurate submission. The MGT-7A must be filed annually after the company’s Annual General Meeting (AGM). If the form is not filed within the prescribed deadline, the company may face a penalty of Rs. 100 per day, with no upper limit.
C. Director and Key Managerial Personnel (KMP) Forms
1. DIR-3 (Application for Director Identification Number):
The DIR-3 form is used by individuals who wish to become directors of a company. This form is necessary to obtain a Director Identification Number (DIN), which is a unique identification number issued to every director of a company. This form is filed on the MCA portal, and the individual director must apply for their DIN. If a director operates without a valid DIN, they may face disqualification or penalties.
2. DIR-12 (Particulars of Appointment of Directors and Changes Therein):
The DIR-12 form is used to notify the RoC about any changes in the composition of the board of directors of a company. It includes the appointment, resignation, removal, or reappointment of directors and any change in the designation of directors.
The DIR-12 form must be filed on the MCA portal by the company directors or authorized representatives. It is required to be submitted within 30 days of the appointment or change in the directorship of a company. If the form is not filed within this timeframe, the company may face a penalty of Rs. 50,000 and an additional fine of Rs. 5,000 per day for continuing defaults.
3. MR-1 (Return of Appointment of Managing Director, Whole-Time Director, or Manager):
The MR-1 form is used by companies to inform the RoC about the appointment of a Managing Director (MD), a Whole-Time Director (WTD), or a Manager in the company.
This form must be filed through the MCA portal, and the responsibility to file it lies with the company directors. It must be filed within 30 days from the date of appointment of the MD, WTD, or Manager. Failure to file the MR-1 form on time can result in significant penalties that include fines of up to Rs. 5 lakhs for the company and Rs. 1 lakh for the officers involved for not filing the form on time.
D. Share Capital and Debentures Forms
1. PAS-3 (Return of Allotment):
The PAS-3 form is used by companies to report the allotment of shares to shareholders after the issuance of shares by the company. This form ensures that the RoC is notified about the new shares issued.
This form must be filed on the MCA portal, and company directors are responsible for submitting it. If the form is not filed, a penalty of Rs. 1,000 per day can be levied, with a maximum cap of Rs. 5 lakh.
2. SH-7 (Notice to Registrar of Any Alteration in Share Capital):
Companies use the SH-7 form to notify the RoC about any changes made to the share capital of the company. This includes any increase or decrease in share capital or any cancellation or modification of shares issued.
The SH-7 form must be filed through the MCA portal, and it is the responsibility of the company directors to submit it. The form should be filed within 30 days of the alteration of the share capital. If the form is not filed in time, the company will incur a penalty of Rs. 1,000 per day, with a cap of Rs. 5 lakh.
3. CHG-1 (Application for Registration of Creation, Modification of Charge):
The CHG-1 form is used when a company creates or modifies a charge on its assets, such as mortgages or other secured loans. It is required to inform the RoC about the creation or alteration of any charge over the company’s assets.
This form is filed on the MCA portal, and company directors are responsible for ensuring it is completed. Failure to file the CHG-1 form can result in penalties that range from Rs. 1 lakh to Rs. 10 lakh for the company and Rs. 25,000 to Rs. 1 lakh for the officers of the company.
E. Corporate Restructuring Forms
1. INC-24 (Application for Approval of Change of Name):
The INC-24 form is filed when a company wishes to change its name and needs approval from the RoC.
This form must be submitted to the MCA portal, and it is the responsibility of the company’s directors to file the application. If this form is not filed properly, the company may face penalties, and in the worst case, it may be unable to change the name of the company completely.
2. INC-28 (Notice of Order of the Court or Tribunal):
The INC-28 form is used to inform the RoC about any orders passed by a court or tribunal affecting the company. These orders may include judicial decisions on the company’s restructuring, liquidation, merger, or any other legal actions.
This form is filed on the MCA portal, and the company directors or authorized representatives are responsible for submitting it. The INC-28 must be filed within 30 days of receiving the order from the court or tribunal. If the form is not filed on time, the company may face penalties, as the law requires it to keep the RoC updated with any significant legal changes affecting the company’s status. Penalties for failure to file the form depend on the nature of the order and the related regulations.
3. GNL-2 (Submission of Documents with the Registrar):
The GNL-2 form is used to submit miscellaneous documents to the RoC. This form serves as a catch-all for documents that do not fall under the categories of other specific forms but need to be officially submitted for regulatory compliance.
This form is filed on the MCA portal, and it is the responsibility of the company director(s) to ensure timely submission. The penalty for non-compliance with filing requirements under GNL-2 depends on the specific document and regulatory requirements.
Conclusion
While filing the forms under the Companies Act 2013, common mistakes include providing incomplete or incorrect information about the company, its directors, and its shareholders. Failure to file the forms on time is another error that occurs often. Timely and accurate submission of the forms is essential for the company’s well-being. Businesses and small corporations need to be more mindful when it comes to filing these forms. It is advisable to consult a professional who can help out to maintain compliance and avoid legal repercussions.
FAQs
1. Can forms be revised after submission?
Some forms allow for revisions, but amendments often require approval from the RoC.
2. What role do professionals play in filing forms?
Chartered accountants, company secretaries, and cost accountants verify and certify forms to ensure compliance and accuracy.
3. How can companies track the status of filed forms?
Companies can track forms on the MCA portal using the Service Request Number (SRN) issued during submission.
4. Are physical submissions still required?
No, all forms under the Companies Act 2013 are filed electronically through the MCA portal.
5. What are the consequences of incorrect information in forms?
Providing false or incorrect information can lead to penalties, legal actions, and disqualification of directors under Section 448 of the Act.
