{"id":22313,"date":"2019-07-27T08:55:54","date_gmt":"2019-07-27T03:25:54","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=22313"},"modified":"2022-09-05T17:42:08","modified_gmt":"2022-09-05T12:12:08","slug":"checklist-for-certification-of-annual-return","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/checklist-for-certification-of-annual-return\/","title":{"rendered":"Checklist for Certification of Annual Return"},"content":{"rendered":"<p class=\"has-drop-cap\">Every company needs to file an annual return. Basically, this is a document that contains information about the activities that took place in the company in the last year and also other related details. This is filed at the end of every year. But before filing the annual return it has to be certified by a practising CS in certain cases certifying the particulars of the document to be true. Now let&rsquo;s learn about <strong>Certification of Annual Return<\/strong> in detail.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is Annual Return?<\/strong><\/h2>\n\n\n\n<p>Annual Return according to the Section 92 of Companies Act 2013 is the yearly statement\/document that gives information about the firm such as, the firm&rsquo;s composition and various other related activities performed by the firm. The form for filing an annual return in MGT-7. This is filed with the Registrar of Companies. Every company needs to file an annual return with the MCA before 30<sup>th<\/sup> November, i.e. at the end of the year, irrespective of its type.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Forms Filled by Company for Filing Annual Return<\/strong><\/h2>\n\n\n\n<p>Under the norms\nof the Companies Act 2013, annual returns are divided into three parts which\nare as follows;<\/p>\n\n\n\n<ul><li>Form MGT7- it is the annual return form as per the Section 92<\/li><li>Form MGT-8- is the certification by the practising Company Secretary {CS} as per Section 92(2)<\/li><li>Form MGT-9- is the Extract of the Annual Return as the part of Board&rsquo;s report under Section 92(3)<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Annual Return Form as per the Section 92<\/strong><\/h2>\n\n\n\n<p>Form MGT 7 is the annual return form as per Section 92 of the Companies Act, 2013. This form is duly filled, signed and certified and then filed with the Registrar of Companies. Every company irrespective of their type has to file the annual return in form MGT 7 to the Registrar. The due date for filling this form is within 60 days from the date of commencement of the Annual General Meeting which is before 30<sup>th<\/sup> September at the end of the year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Which Companies Need to Fill Form MGT-8?<\/strong><\/h2>\n\n\n\n<p>Complying with <strong>Section 92<\/strong><sup><a href=\"http:\/\/www.mca.gov.in\/Ministry\/pdf\/GoaAdjOrd109_05112019.PDF\"><strong>[1]<\/strong><\/a><\/sup> all companies need to get annual return certification. The types of companies who need to get certification by PCS in form MGT-8 are as follows;<\/p>\n\n\n\n<ul><li>Company having paid-up capital of Rs. 10 crores or more<\/li><li>Having a turnover of Rs. 50 crore or more<\/li><li>Should be a listed company<\/li><\/ul>\n\n\n\n<blockquote class=\"mb-5\" style=\"border: 1px solid;font-size:17px; padding: 10px; box-shadow: 5px 10px 8px #888888; background: #759CE3; ; color: #fff;\"><strong> Note- According to Section 92 of Companies Act 2013, in small companies and One Person Company the annual return is signed by the company secretary or only by the director if there is no CS in the company. <\/strong><\/blockquote>\n\n\n\n<h3><b>Also, Read:<\/b> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/enterslice.com\/learning\/simple-steps-for-opc-registration\/\">OPC Registration Doesn&rsquo;t Have To Be Hard. Read These Simple Steps<\/a><\/mark>.<\/h3>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is the Objective of Filing Annual Return?<\/strong><\/h2>\n\n\n\n<p>The main purpose\nof filing Annual Return is to provide annual information of the company&rsquo;s activities\nto the Registrar of Companies and its members about the company&rsquo;s registered\noffice, capital structure, debts, members, CS, directors, details of any\npenalty imposed on company, details board meetings, debenture holders, etc.<\/p>\n\n\n\n<p>It is the\nresponsibility of the management department of the company to file the Annual\nReturn. This helps shareholders to ensure that the company is working in\ncompliance with all the norms as prescribes by the government. It also helps to\nmonitor if the functions of the company are in the interest of its members and\ncreditors.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Necessity of Signing and Certification of Annual Return<\/strong><\/h2>\n\n\n\n<ul><li><strong>The Signing of the Annual return<\/strong><\/li><\/ul>\n\n\n\n<p>According to Section 92(1) of the Companies Act, the annual return must be signed by the Director and Company Secretary. However, in small companies, the director certifies the document in the absence of a Company Secretary. <\/p>\n\n\n\n<ul><li><strong>Certification\nof the Annual return<\/strong><\/li><\/ul>\n\n\n\n<p>Certification of Annual Return is not mandatory in the case of small companies. According to Section 92(1) of the Companies Act and the Companies rules, 2014 the annual return must be certified by the Practicing \/ Company Secretary. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Extract of the Annual Return as per Section 92(3)<\/strong><\/h2>\n\n\n\n<p><em>Form MGT 9 contains the following information divided into seven parts;<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Registration Details<\/h3>\n\n\n\n<ul><li>Name of the company<\/li><li>CIN<\/li><li>Date of incorporation<\/li><li>Category of the company<\/li><li>Address and contact details<\/li><li>Registered office<\/li><li>Name, address and contact details of RTA<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Primary Business Activities of the\ncompany<\/h3>\n\n\n\n<ul><li>Details of all activities of the business<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Details of Holding, Subsidiary and\nAssociate Companies<\/h3>\n\n\n\n<ul><li>Name &amp; address of these companies along\nwith<ul><li>Corporate\nidentity number\/ Global Location Number<\/li><\/ul><ul><li>Nature of relation<\/li><\/ul><ul><li>Percentage of\nholdings<\/li><\/ul><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Pattern\/Category wise Shareholding of\nPromoters<\/h3>\n\n\n\n<ul><li>Foreign\/Indian<\/li><li>Shareholding of promoters<\/li><li>Public Shareholding<\/li><li>Custodian for GDR and ADR<\/li><li>Change in promoters&rsquo; shareholding<\/li><li>Shareholding of directors and other key managerial\npeople<\/li><li>Shareholding pattern of top 10 shareholders<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Indebtedness<\/h3>\n\n\n\n<ul><li>Deposits <\/li><li>Unsecured loans<\/li><li>Secured loans excluding deposits<\/li><li>Total Indebtedness at the beginning of the\nfinancial year\/any change during the year\/ or at the&nbsp; end<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Remuneration of Directors and other Key\nManagerial People<\/h3>\n\n\n\n<ul><li>Remuneration to managerial\/whole-time\ndirectors and managers along with the details of Remuneration<\/li><li>Remuneration to other directors {Independent,\nother non-executive directors} with particulars<\/li><\/ul>\n\n\n\n<h3><b>Also, Read:<\/b> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/enterslice.com\/learning\/form-a-private-limited-company\/\">9 Reasons to Form a Private Limited Company<\/a><\/mark>.<\/h3>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Documents which needs Verification for Certification<\/strong><\/h2>\n\n\n\n<p>These documents\nneed to be obtained for verification to get the certification are as follows;<\/p>\n\n\n\n<ul><li>Register of members<\/li><li>Forms and receipts filed with the registrar of Companies<\/li><li>Memorandum and article of association<\/li><li>Share transfer register<\/li><li>Register of charges<\/li><li>Disclosure forms from directors for the period before the annual return certification<\/li><li>Minutes of the board meeting, AGM, transfer of shares, remuneration, audit committees<\/li><li>Copy of latest balance sheet with notice of AGM<\/li><li>List of shareholders in CD in PDF format, details of share transfer taking place between the current and previous AGM date etc.<\/li><li>Certificate from RTA depicting the number shareholders at the end of the financial year<\/li><li>Signed indebtedness certificate <\/li><li>&nbsp;Register of investments of the company<\/li><li>Other documents that may be required<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Who Certifies the Annual Return?<\/strong><\/h2>\n\n\n\n<p>In companies other than <strong><a href=\"https:\/\/enterslice.com\/one-person-company\">One Person Company<\/a><\/strong> or small companies a practising company secretary certifies the annual return. The PCS issued the certification in the form MGT 8 which proves that all the particulars of the annual return to be true and in compliance with the provisions of this act. This is done as per the Sub-section 2, Section 92 of the Companies Act, 2013.<\/p>\n\n\n\n<p>However, in small companies and One Person Company, this is done by the company director in case there is no company secretary. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What does Section 92 of the Companies Act Specify?<\/strong><\/h2>\n\n\n\n<p>Annual return according to this\nsection is a return that every company needs to file every year irrespective of\ntheir type.<\/p>\n\n\n\n<ul><li><strong>Sub-Section 1: <\/strong>Sub-section 1 specifies that it is mandatory\nfor every company to file this return at the end of every financial year and it\nshould contain the following;<\/li><\/ul>\n\n\n\n<ul><li>Particulars of the shareholders<ul><li>Debenture holders<\/li><li>Details of the Company&rsquo;s directors\/secretaries<\/li><li>List of any charges against the assets of that firm<\/li><li>Address of registered office<\/li><li>Indebtedness <\/li><li>Location of registered members<\/li><li>Particulars of meetings of members\/class of members\/board\/committees of the board of directors<\/li><li>Copy&nbsp; of financial statement<\/li><li>Registration details of the company<\/li><li>Details of the turnover and net worth of the company<\/li><\/ul><\/li><li><strong>Sub-Section 2: <\/strong>The annual return filed by a listed or a company or company with specified paid-up capital should get it certified by a practising company secretary in the specified form.<\/li><li><strong>Sub-Section 3: <\/strong>Sub-section 3 prescribes an extract of the annual report to be a part of the company&rsquo;s Board&rsquo;s report<\/li><li><strong>Sub-Section 4: <\/strong>Every company needs to file a copy of the annual return to the registrar within sixty days of Annual General Meeting.<\/li><li><strong>Sub-Section 5: <\/strong>Sub-section 5 states that the defaulter company is liable for a fine from Rs. 50,000 to Rs. 500,000. Also that every defaulting officer can be punished with a fine ranging from Rs.50,000 to Rs. 500,000 or with imprisonment up to six months or both.<\/li><li><strong>Sub-Section 6: <\/strong>If a PCS certifies an annual return that does not comply with the specified rules is liable for a fine ranging from Rs.50, 000\/- to Rs. 5,00,000\/-. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is Certification and why is it Necessary?<\/strong><\/h2>\n\n\n\n<p>Certification is proof that states the particulars contained in the annual return are true and they are in compliance with the provisions of the Companies Act, 2013. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Penalty on Failing to File Annual Return<\/strong><\/h2>\n\n\n\n<p>Any\ncompany who fails to file their annual return according to the Sub-section 5,\nSection 92 of the companies Act, 2013 is liable for penalties as follows;<\/p>\n\n\n\n<ul><li>Fine ranging from Rs.50,000 to\nRs. 5 lakhs<\/li><li>Every officer in default of the\ncompany is liable for imprisonment up to six months or a fine of Rs.50,000 to\nRs. 5 lakhs or both<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>To Conclude<\/strong><\/h2>\n\n\n\n<p>Every company needs to file an annual return with the Registrar of Companies before the 30<sup>th of<\/sup> September every year. That has to be certified before filing. Small companies and One Person Company it is signed by the company secretary or the director signs it in case there is no CS in the company.<\/p>\n\n\n\n<p>Certifying proves the data to be correctly contained in it and also they are in compliance with the Companies Act, 2013. This is done in the form MGT 8 in case of prescribed companies. Furthermore, the form used by companies to file the annual return to the registrar is the form MGT 7.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/enterslice.com\/learning\/incorporation-of-company-with-foreign-director\/\">Incorporation of Company with Foreign Director\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every company needs to file an annual return. Basically, this is a document that contains information about the activities that took place in the company in the last year and also other related details. This is filed at the end of every year. But before filing the annual return it has to be certified by [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":22330,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1290,2369],"tags":[2606],"acf":{"service_id":"321"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Checklist for Certification of Annual Return - Enterslice<\/title>\n<meta name=\"description\" content=\"Certification of Annual Return - Every company needs to file an annual return with the MCA before 30th November. 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