Annual Return Filing under Section 92 of Companies Act, 2013

Fulfilling the statutory obligation under Section 92 of the Companies Act, 2013, annual return filing is a pivotal facet of corporate compliance. This comprehensive guide navigates through the intricacies of the process, covering various aspects. Part I delves into the content of the annual return, emphasizing the meticulous details required, from company information to capital structure and stakeholders’ changes. Part II sheds light on mandatory and optional attachments, ensuring companies compile and submit the requisite documentation. Authentication protocols are discussed in Part III, distinguishing signing requirements for different company types. Part IV elucidates the certification process, essential for listed companies and those meeting specific criteria. The obligation to disclose the annual return in the Board’s Report is detailed in Part V, emphasizing transparency. Part VI outlines the timeline and consequences for filing returns, crucial for avoiding penalties discussed in Part VII. Part VIII offers insights into filing fees and additional costs for delays, vital for financial planning. The exhaustive Business Activity Code List in Part IX aids in accurate categorization. This guide serves as an indispensable resource, not only outlining the procedural aspects but emphasizing the significance of compliance for maintaining a company’s legal standing and reputation in the business landscape. Regular updates are recommended, given the dynamic nature of regulatory frameworks.

Every company shall file its annual return in Form MGT-7 except One Person Company (OPC) and Small Company. One Person Company (OPC) and Small Company shall file its annual return in Form MGT-7A.

Part I: Content of Annual Return & Instruction for filing eForm

This section forms the foundation, detailing the necessary information a company must provide in its annual return. Covering aspects like Company Information, Capital Structure, Stakeholders’ Changes, and more, it sets the stage for accurate and comprehensive reporting. The guide emphasizes the importance of meticulous data entry and adherence to the prescribed form.

According to sub-section (1) of Section 92, every company shall prepare a return in the prescribe form containing the particulars as they stood on the close of financial year regarding: –

Clause (a) [Company Information]: –

1. its registered office,
2. principal business activities,
3. particulars of its holding,
4. subsidiary and associate companies,

By entering a valid CIN in the relevant field.

• On clicking the Pre-Fill button, system will automatically display the name, address of the registered office, email ID of the company (if available), Telephone number with STD Code (if available), Date of incorporation and other details like Type, Category, Sub-category and whether company is having Share capital.
• In case there is any change in the email ID and telephone number, enter the new details.
• In case any other detail so prefilled is different as on the financial year end date entered then the same can be modified. However, changes would be taken up in MCA records based on the relevant eForm filing.
• Particulars of holding, subsidiary and associate companies including joint venture.
• Details for whether the company is holding, subsidiary associate company or joint venture.
• Number of business activities, Main Activities group code and Business Activity Code (Activity Codes are based upon NIC-2008 codes, it is advisable to refer the same)
• % of turnover of the company for each main activity undertaken.

Clause (b) [Capital Structure]: –

1. its shares,
2. its debentures,
3. other securities and
4. shareholding pattern

Entire block will be applicable only in case the company is having share capital.

• Enter the details of share capital for:
  • Equity share capital
  • Preference share capital
  • Unclassified share capital (not applicable for OPC)
  • Break-up of paid-up share capital (not applicable for OPC)
• Number of classes: each kind of share capital, based on the number of respective type of class of shares.
• Class of shares: details of unique type of same class of shares.
• Break-up of paid-up share capital (not applicable for OPC): In case of small company, provide break-up of paid-up capital.
• Date of Registration of Transfer.
• Whether the shares listed on recognized Stock Exchange(s), if yes, the details of stock exchange where shares are listed.
• Details regarding Registrar and Transfer Agent.

Clause (d) [Stakeholders’ Changes]: –

1. its members and debenture-holders,
2. along with changes therein since the close of the previous financial year 

• Details of shares/Debentures Transfers since closure date of last financial year (or in the case of the first return at any time since the incorporation of the company) * (not applicable for OPC).
• Details in relation to:
  • Indebtedness including debentures: details of debentures, loan and deposits taken by the company which is outstanding as on the financial year end date.
  • Securities, other than shares and debentures.
• Turnover and Net Worth of the company
• Shareholding Pattern – Public/Other than promotors 

Clause (e) [Management’s Changes]: –

1. its promotors,
2. its directors,
3. its key managerial person,
4. along with the changes therein since the close of the previous financial year 

• Shareholding Pattern – Promotors
• Composition of Board of Directors.
• Details of directors and Key managerial personnel as on the closure of financial year.
• Particulars of change in director(s) and Key managerial personnel during the year 

Clause (f) [Meetings and Attendance]: –

• Details of Members/Class/Requisitioned/NCLT/Court Convened Meetings
• Board Meetings, Committee Meetings
• Attendance of Directors

Clause (g) [Remuneration of Management]: –

1. remuneration of directors and
2. remuneration of key managerial person

Clause (h) [Legal Actions and Outcomes]: –

1. penalty and punishment imposed on the company,
2. its directors or officers and
3. details of compounding of offence and
4. appeals made against such penalty or punishment.

Clause (i) [Compliance and Disclosure]: –

1. matters relating to certification of compliance,
2. disclosures as may be prescribed

Clause (j) [Foreign Institutional Investors]: –

1. details, as may be prescribed, in respect of shares held by or on behalf of the foreign institutional investors,

Clause (k) [Other Matters]: –

1. such other matters as may be prescribed.

Part II: Attachments

The second part elaborates on the mandatory and optional attachments. It provides clarity on documents such as lists of shareholders, debenture holders, approval letters for AGM extensions, and MGT-8 certificates of compliance. By understanding these requirements, companies can ensure their filings are complete and in accordance with regulations.

1. List of Shareholders, debenture holders shall be mandatory in case of company having share capital.

2. Approval Letter for extension of AGM, if applicable.

3. Copy of MGT-8 (Certificate of Compliance).

4. Optional Attachment(s), if any shall be mandatory in certain cases such as ‘details of transfer’ (if high in numbers that cannot be entered in Form MGT-7/7A).

Part III: Authentication

This section delineates who can sign the annual return, differentiating between various types of companies. It clarifies the signing requirements for OPC, small companies, and others. Understanding the authentication process is critical, ensuring that the annual return is legally binding and compliant.

Such Annual Return, in case of companies other than OPC and small company, has to be signed by: –

1. a director of the company, and

2. company secretary, or

3. a company secretary in practice (if there is no company secretary)

in case of OPC and Small Companies such annual return has to be signed by: –

1. the company secretary, or

2. the director (if there is no company secretary)

Part IV: Certificate of Compliance

The certification requirement for certain categories of companies is explored here. It explains the significance of obtaining a certificate from a Company Secretary in practice, stating that the annual return discloses facts accurately and the company has complied with all provisions of the Act.

According to sub-section (2) of section 92 read with Rule 11(2) of the Companies (Management & Administration) Rules, 2014, the annual return filed by a company: –

1. which is a listed company, or

2. a company

• having paid-up share capital of Rs 10 crore or more; or
• a turnover of Rs 50 crore or more

shall be certified by a Company Secretary in practice in form MGT-8.

The certificate must state that “the annual return discloses the facts correctly and adequately and that the company has complied with all provisions of the Act.”

Part V: Disclosure in Board’s Report

Every company shall place a copy of the annual return on the website of the company, if any, and the web link of such return shall be disclosed in the Board’s Report also Board’s Resolution number and date authorizing filing Annual Return shall be entered in the Annual Return.

Part VI: Filing of Return

Understanding the timeline for filing the annual return is crucial. This part outlines the deadlines, linking them to the date of the Annual General Meeting (AGM). It further specifies the consequences of not holding an AGM and emphasizes the importance of timely compliance.

A copy of annual return shall be filed with the Registrar of Companies (RoC)

1. within 60 days from the date on which the Annual General Meeting (‘AGM’) is held or

2. where no annual general meeting is held, within 60 days from the date on which annual general meeting should have been held, long with the reason for not holding the annual general meeting.

Part VII: Penalty for Contravention

This section outlines the penalties for failing to file the annual return within the specified period. It details the fines imposed on the company, its officers, and the company secretary in practice. Clear comprehension of these penalties is vital for companies to avoid legal ramifications.

According to sub-section (5) of section 92, if a company fails to file its annual return under sub-section (4), before the expiry period specified therein,

1. such company and every officer in default shall be liable to a penalty of Rs 10,000 and

2. in case of continuing default, with further penalty of Rs 100 per day for each day of such continuing default,

• subject to a maximum of Rs 2,00,000 in case of company and
• Rs 50,000 in case of an officer in default.

3. If a company secretary in practice who certifies such return otherwise than in accordance with this section and the rules made thereunder, he shall be liable to a penalty of Rs 2,00,000

Part VIII: Fee for filing Annual Return

A breakdown of the filing fees based on nominal share capital is provided in this part. Additionally, it outlines the additional fees applicable for delays in filing, offering insights into the financial implications of non-compliance.

1. Fee for filing (in case of company not having share capital)

• Rupees 200

2. Fee for filing (in case of company having share capital)

3. Additional Fee

• Delay beyond period provided under Section 92(4) of the Act – Rs 100 per day.

4. In addition to above, the following table of additional fee shall be applicable for delay in filing of belated annual return.

Part IX: Business Activity Code List

The guide concludes with an extensive list of business activity codes, aiding companies in accurately categorizing their operations. This ensures that companies align their activities with the prescribed codes, facilitating accurate reporting and compliance.

Conclusion: Filing the annual return under Section 92 is not just a legal requirement but a fundamental aspect of corporate governance. This article serves as a comprehensive guide, ensuring companies understand the intricacies of the process, the importance of accurate information, and the consequences of non-compliance. Staying informed and compliant is key to maintaining the legal standing and reputation of any business entity.

For the latest updates, companies are advised to refer to amendments to the Companies Act, 2013, as the regulatory landscape may undergo changes.