ROC returns are financial statements or annual returns of a company that must be filed on time to the registrar of companies with the MCA each year. It is mandatory for companies to intimate about the management via prescribed ROC forms on an annual basis, just like an Income tax return is submitted to the Income tax department. As per Companies Act, 2013, non-filing of annual return is an offence. Hence, it is indispensable for a company to file the annual return with the MCA within 60 days of the Annual General Meeting and within 30 days for a Financial Statement.
Form AOC 4 & MGT-7 are required to be filed with ROC within 30 days & 60 days from the date of Annual General Meeting of the company respectively.
The timely and yearly filing of Roc forms avoids the burden of penalty, which may arise due to non-filing as required by the Companies Act, 2013 law. In this blog, we’ll have a look at the various consequences and the penalties for non filing of RoC on time.
Consequences of Late filing of Forms
In cases related to delay in filing the belated annual returns/balance sheet/financial statement the following fees is defined:
|Period of Delay||Additional fee|
|Till 30 days||2 times of normal filing fees|
|More than 30 days and up to 60 days||4 times of normal filing fees|
|More than 60 days and up to 90 days||6 times of normal filing fees|
|More than 90 days and up to 180 days||10 times of normal filing fees|
|180 days and beyond||12 times of normal filing fees|
Consequences of not filing the following forms under RoC
One of the main compliances that companies have to fulfill while Annual ROC Filing is the filing of form MGT 7. Section 92(4) of the Companies Act, 2013 clearly states that every company is required to file a copy of Annual returns through Form MGT-7 and nominal fees with the Registrar of Companies within 60 days from the holding of the Annual General Meeting.
If a company fails to file the copy of the Annual Return within 60 days from the date of Annual General Meeting, it can file the same after 60 days of AGM but with the collected payment of additional fees of Rs.100/- each per day.
In cases of non filing of Annual return of a company, both Company and Every Director are liable for the Penalty. The provisions of penalty states that the both the company and its every officer who is in default shall be liable to a penalty of Rs. 50,000/- and in case of continuing failure, with further penalty of Rs. 100/- for each day during which such failure continues, subject to a maximum of Rs. 5,00,000/-.
(It must be noted that the penalty is required to be paid only if you receive notice from the Registrar and it is levied after due adjudication by AO otherwise additional fees at the rate of Rs.100/- per day is sufficient.)
As the the Act, every Company is required to file a copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be attached to such financial statements, with the Registrar within 30 days of the date of Annual General Meeting in form AO4-4 with normal fees.
In case of failure, a company and its directors are liable for penalty. A fine of Rs. 1,000 per day is levied which can be maximum up to Rs. 10,00,000. The company’s CFO and the Managing Director (if any), and in absence of them any other director who has been provided with the responsibility to comply with the provisions of the section related to Form AOC-4 and, in absence of such a director all the directors in the company are accountable to pay a charge of Rs. 1,00,000.
In case the ROC filing is still at a failure a penalty of Rs. 1000 per day is imposed which cannot be more than Rs. 5,00,000 in total.
Effect on Company and its Directors on Non filing of statements/annual returns
Effect on Company
In cases where the Company has not filed its Annual Return for the continuous period of 2 years, then such companies would be coined as an “inactive company”. It will be assumed that the particular business is closed because the returns AOC-4 and MGT-7 are not filled for a continuous period of 2 years. On such a classification, the bank account of the company could be frozen. Further, the Registrar could also issue a notice to the Company and initiate strike-off of the company from the MCA records after providing reasonable opportunity of being heard.
Effect on directors
If the directors of the company have failed to file both Form MGT-7 and AOC-4 for the consecutive three years, then they are disqualified to be re-appointed in the same company or appointed as director in any other company for next five years (from the date on which the said company fails to do so)
You must file RoC not for the sake of fear of penalties but it has various advantages too. The filing of annual forms requires the compilation of accounts for the entire year which helps to analyse the financial position of the company. Every company wants to know weather it is incurring losses or making profit. ROC return filing offers benefits beyond the mandated requirement.
It also serves as a proof of existence as the Government keeps the record of the existence of the companies on the basis of the regular filings which every company is required to file