Elements of annual return

annual return

An annual return is a mandatory filing that every company incorporated in India is required to submit to the Ministry of Corporate Affairs. It is a summary of a company’s activities during the financial year and must be filed by all companies, regardless of their size or turnover. Failure to file an yearly return can result in penalties, fines, or legal action against the company.

  • For Private Limited Companies, the submission of an annual return is legally required each year.
  • The annual return document contains details such as the company’s share capital, debts, directors, shareholders, and other pertinent information.
  • To comply with the regulations, Private Limited Companies must complete and submit Form MGT-7 to file their annual return.
  • Under the Companies Act of 2013, it is mandatory for businesses to file an yearly return and other necessary documents to the Registrar of Companies (RoC).
  • Failure to submit the annual return may result in penalties being imposed on the business.

Elements of Annual Return

  • Basic information about the company, such as its name, registered office address, and principal business activities.
  • Details of the company’s shareholders and the number and types of shares issued.
  • Information on the company’s directors and key management personnel, including their names, addresses, and positions held.
  • The company’s audited financial statements, including balance sheet, profit and loss account, and cash flow statement.
  • Details of any loans or guarantees provided to the company’s directors or other related parties.
  • Information on any legal proceedings or disputes involving the company.
  • Details of any changes in the company’s share capital or ownership structure during the year.
  • A statement from the company’s directors confirming that all required filings have been made and that the information provided in the annual return is accurate and complete.
  • Any other information required by law or regulation in the company’s jurisdiction.

Power to sign the yearly return

In order to sign the yearly return, either the director of the company or the company secretary is required to provide their signature on the annual report. If a Private Limited Company does not have a company secretary, any practicing company secretary may sign the yearly return form MGT-7 on the company’s behalf.

Under the Companies Act of 2013, it is mandatory for a Private Limited Company to have a company secretary who is responsible for certifying the company’s compliance with annual return requirements. A Form MGT-8 certificate will be issued in the appropriate format, confirming that the information provided in the company’s annual filings is accurate and that all procedures outlined in the Companies Act of 2013 have been followed.

Effects of failing to file an annual return

The yearly return should be filed within 60 days of the Annual General Meeting (AGM) with the Registrar of Companies (ROC). If the AGM was not held on the scheduled date, then the filing deadline will be 60 days from that date. In the case of Private Limited Companies, if the AGM was not held, a justification for the same must be provided to the ROC along with the form MGT-7 compliance.

Conclusion:  Filing an yearly return is a crucial aspect of running a business in India. It provides stakeholders with an overview of the company’s financial health, ownership structure, and compliance status. By understanding the components of an annual return, companies can ensure that they file accurate and timely returns and avoid penalties, fines, or legal action.

If you need assistance in filing your annual return or have any queries, please connect with us at [email protected] or you can contact us  & stay updated with our latest blogs & articles.

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