Read about Filing of Annual Return as Per Companies Act 2013

Priyanka Bajpayee

26 Nov, 2019

Every company is required to file an annual return with the Registrar of the Companies at the end of financial year. Filing of Audited Financial Statement and Annual return within a period of 30 days and 60 days from the date of the conclusion of the Annual General Meeting. This blog will help you to gain knowledge about the procedure involved while filing of annual return.

What is Annual Return?

The annual return is a return filed to the ROC which contains the requisite information about a company’s financial position, structure and activities involved. Every company incorporated under the Companies Act 2013 or 1956, need to file an Annual Return at the end of every financial year. As per the provisions of the Companies Act 2013, the Annual return shall consist of the following information-

• Detailed Financial Statement.
• Details of Directorship or any change in directorship,
• Details of Shareholders and Debenture holders,
• Disclosure of Share Transfer,
• Disclosure of charges against the Company,
• Details of the registered office

Categories Required to File Annual Return.

3 class of categories of companies are required to file and comply with the provision of filing an annual return;

1. The Company with Class 1 category incorporated under the Companies Act, 2013 of the Companies Act, 1956 is required to file an Annual Return in Form MGT 7 within 60 days from the date of the conclusion of its Annual General Meeting. Further, Financial statement is also required to be filed by the companies Form AOC-4 within 30 days from the conclusion of their AGM.
2. Class II: In the Strike-off Public Notice, Companies whose name has been published for not complying with the Annual Compliance and Filing.
3. Class III: Companies with the disqualified director under Section 164(20) for not filing an annual return.

What are the steps involved while fling Annual Return-The following steps are involved while filing the annual return;

Proper maintenance of Accounts-

For every company filing the Annual return, it is obligatory to maintain a Book of Accounts which helps in keeping track of the financial matters of the company. As per the Companies Act, 2013, it is mandatory for all companies to maintain a Book of Accounts in a specified format.

Books of Account shall include-

1. Disclosure of amount received or spent by the company,
2. Assets and liabilities of the company
3. Sales and purchases of the company
4. Other relevant financial or business arrangements.

Company’s Financial Statements-

The Financial Statement is based on the Books of account prepared by the Company. Financial Statement is a statement that reflects the accountability of the company. The financial statement is a source of interaction between the entity and the shareholder. For filing financial statements, Form AOC-4 is required to be filed for each financial year with the Registrar of the Companies. Financial Statement includes –

• Balance Sheet,
• Profit and Loss Account,
• Explanatory note annexed to the above document.

Conducting Audit of Financial Statements-

For conducting Audit of Financial Statements, every Company is required to appoint its 1^st Auditor within one month from the date of incorporation of the company.

After being appointed by the Company, The Auditor needs to audit the financial statements of the Company and submit the report on the Books of accounts of the Company to the stakeholders. The Auditor is also required to furnish in his report whether the accounts of the Company give a true and fair view of the state of affairs of the Company.

Conducting an Annual General Meeting

An Annual General Meeting is a communicant of the shareholders of a Company held every year. An Annual general meeting gives a comprehensive view of what steps a company shall make to be more successful, which helps the shareholders, members, and the board to decide the future course of action. The annual general meeting must be held on a working day at the registered office of the company.

The Annual General Meeting shall be held within 15 months from the date of commencement of the previous Annual General Meeting. In the case of a newly incorporated company, the first meeting must be held within 18 months from the date of incorporation of the Company.

The Procedure involved while filing Annual Return

The procedure involved for filing the annual return and Audited financial statement to the Roc can be easily understood by the below-mentioned steps-

1. Conducting a Board Meeting and by Passing a Board Resolution-

• To Appoint and authorize the auditor for the preparation of financial statements as per Schedule III of the Companies Act, 2013.
• To Authorize the Director of the Company or Company Secretary for preparation of Board Report and Annual Return as per the Companies Act, 2013.

2. Conducting the 2nd Board Meeting for approving the draft financial statements, Board Report and Annual Return by the directors of the company.

3. Furthermore, Conducting the Annual General Meeting of the Company and pass the necessary resolutions.

Forms used for filing Financial Statement (AOC-4) and Annual Return (MGT-7)

Certification of the Annual Return: Annual Return shall be signed by the Director and Company Secretary of the Company.

In case there is no Company Secretary in the company, a Practicing Company Secretary shall sign the Annual Report.  

Note-However, in the case of OPC (One Person Company), it shall be signed by the director of the company.

Key content and Documents of MGT-7

The following documents are required to be submitted along with the Form MGT 7-

• Balance Sheet of the Company, Profit & Loss Account
• Compliance Certificate, Registered Office Address
• List of shareholders and shareholding structure of the company
• Details of transfers or Transmission of shares.
• Details of Shares and Debentures
• Directorship Details and details of Change in Directorship.

Conclusion-

For all companies registered under the Companies Act, 2013 or Companies Act 1956, Filing of Annual Return is mandatory compliance. Further, the extract of the Annual return is attached to the Board Report in Form MGT-9.