Annual means yearly, return means statement. Thus, Annual Return means a Yearly statement which gives essential information about a Company’s composition, activities, and financial position, and which must be filed by every Company whether having share capital or not.
Contents of Annual Return: –
Every Company shall prepare Annual Return in Form MGT- 7 containing the particulars as stood on the close of the Financial Year. Some of the details required to be filed under new Act are as following: –
Important provisions: –
|1.||Details to be provided as on which date||
|2.||Form of Annual Return .||MGT-7|
|4.||Certification by PCS in Form-MGT-8||
Certification by PCS, in case of the above mentioned companies, stating that the Annual Return discloses the fact correctly and adequately and the Company has complied with all the provisions of the Act.
|5.||Extract of Annual Return||
It shall form part of Board’s Report. To be provided in Form MGT-9.
|6.||Time period for filing Annual Return||
Within sixty days from the date of AGM/Due date of AGM. If there is a delay beyond 60 days in filing of Annual Return, then per day additional fees of Rs 100 shall be levied by the Ministry of Corporate affairs.
|7.||Preservation of Annual Return||
Copies of all annual returns and copies of all certificates and documents required to be annexed thereto shall be preserved for a period of 8 years from the date of filing with the Registrar.
Penalty for Non Compliance of Section 92: –
Penalty has been substantially increased by Companies Act, 2013. Company Secretary and Company Secretary in Practice has been brought under penal jurisdiction. Thus there is a huge responsibility not only on the Company’s Directors and Secretary of the Company but also on the professional who signs the Annual Return.
The Company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.
|2.||Officers in default||
Every Officer in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.
|3.||Company Secretary in Practice||
If a PCS certifies the Annual Return not in conformity with the Act, he shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.
Penalty under Section 447 and 448: –
Section 448 provides that if in any return, report, certificate, financial statement, prospectus, statement or other document, any person makes a statement,-
he shall be liable under Section 447 and the same provides for the punishment for fraud.
Thus if there is any sort of discrepancy in Annual Return, any person who is found guilty of any fraud or misstatement, he shall be liable not only under Section 92 but also under the penal provisions of Section 447.
Major Changes vis-à-vis the old Act: –
Companies Act, 2013 has brought about a wide range of difference with the older act in respect of dealing with the concept of Annual Return, and hence, there always remains an urgent need to understand the difference which has been simplified below: –
Particulars as mentioned under Section 92 are to be filed as on closing of the financial year not as on date of Annual General Meeting.
|2.||Information Provided is enlarged||
Matters in respect of which information has to be provided is enlarged under the Companies Act, 2013. The following are new requirements: –
|3.||OPC and Small Company||
With the introduction of OPC and Small Companies, Annual Return is required to be furnished for the same.
|4.||Extract of Annual Return||
An extract of the annual return in Form No. MGT.9 shall be annexed to the Directors Report [Section 134(3)(a)].
|5.||Declaration from PCS||
Companies whose paid-up share capital of `Ten crore or more or turnover of `Fifty crore or more is required to obtain a certificate in Form MGT.8 from Company Secretary in Practice.
Penalty has been substantially increased. Company Secretary and Company Secretary in Practice brought under penal jurisdiction. (Details explained above).
Inspection of Annual Return: –
Every company has to make arrangements to make Annual returns available for inspection by any member or debenture holder without payment of fee and to others on payment of prescribed fee during business hours of the Company. This information is put on public record, so that the lenders and other entities dealing with the firm can get a ‘true and fair view’ of the state of its financial affairs.