Background – Ministry of Corporate affairs is coming up with the new clarifications and circulars every single day for doing away with the loopholes and confusions created under the Companies Act, 2013, and putting queries at rest. Two spectrums of areas of Companies Act, 2013(Act, 2013) was dealt with recently vide MCA General Circular No: 22 dated 25.06.2014 (the Circular).
1. Format of Annual Return applicable for Financial Year 2013-14:
Ministry notified Section 92 of the Act, 2013 dealing with Annual Return with effect from 1st April, 2014. Relevant extracts of the Section 92 of Act, 2013:
“Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year.”
The format for the same was given in Rule 11(1) of the Companies (Management and Administration) Rules, 2014 i.e MGT-7. As per Section 159 of the Companies Act, 1956 (Act ,1956) companies had to prepare Annual Return giving position from the date of last Annual General Meeting till the date of current Annual General Meeting. However, as clear from the above stated relevant extract of Section 92 of the Act, 2013 the companies are required to file their Annual Return giving position as on the close of the Financial Year. This nevertheless created bundle of confusions for the companies intending to file annual return for FY 2013-14.
On account of the same the MCA in its Circular came up with the clarification with regard to format of annual return applicable for FY 2013-2014. MCA has clearly specified that the format of Annual Return under Act, 2013 (Form – MGT-7) shall not be applicable to the Companies whose financial year ended on or before 1st April, 2014. These Companies are to file the Annual Return as per the old format (Schedule V) as per Act, 1956. The same will be filed with the Registrar within 60 days from the date of AGM in eForm 20B. This clarification has been a breather to the Companies putting confusions at rest, as Annual Return Format prescribed under Act, 2013 is a 36 pager lengthy format requiring number of details in comparison to the simple 4-5 pager format under Act, 1956.
Hence the Companies are now required to file Annual Return for the Financial Year 2013-2014 in Schedule V format in Form 20B.
II. Fees for inspection of records and other documents.
Companies had also sought clarity on fees for allowing inspection of records and other documents.
Relevant extract of the Rule 14(2) of the Companies (Management and Administration) Rules, 2014:
“(2) Any such member, debenture holder, security holder or beneficial owner or any other person may require a copy of any such register or entries therein or return on payment of such fee as may be specified in the articles of association of the company but not exceeding ten rupees for each page. Such copy or entries or return shall be supplied within seven days of deposit of such fee.”
Relevant extract of the Rule 16 of the Companies (Management and Administration) Rules, 2014:
“Copies of the registers maintained under section 88 or entries therein and annual return filed under section 92 shall be furnished to any member, debenture-holder, other security holder orbeneficial owner of the company or any other person on payment of such fee as may be specified in the Articles of Association of the company but not exceeding rupees ten for each page and such copy shall be supplied by the company within a period of seven days from the date of deposit of fee to the company.”
To bring about a parity between the two rules the Ministry clarified that till the time the companies amends its Articles of Association providing such amount of fees for inspection of such documents in order to comply with Rule 14(2) and Rule 16 of the Companies (Management and Administration) Rules, 2014; such inspections is to be provided to all the members, debenture holders, any other security holders or any other beneficial owner of the company or such other person free of cost.
[The above post is contributed by Ruchira Shinde at Vinod Kothari & Co. She can be contacted at firstname.lastname@example.org]