Avoid Hefty Penalties: File Your Annual Return on Time
Section 92 of the Companies Act 2013 mandates that every company must file its Annual Return within sixty days from the date of its Annual General Meeting (AGM). Failure to comply with this requirement results in significant penalties. Recently, the Registrar of Companies (ROC) Mumbai has imposed a hefty fine of ₹4,53,200 on a Private Limited company and its directors for not filing their Annual Return on time. This substantial penalty underscores the critical importance of timely compliance with statutory filings to maintain your company's good standing and avoid costly repercussions.
If your company has not yet filed its Annual Return, it's time to take action. Talk to IndiaFilings experts today and file your Annual Return with MCA to ensure compliance and protect your business from unnecessary fines.
Understanding the MCA's action of levy of Penalty of Rs 4.53 lakhs against Non-Filing of Annual Return
As mentioned above, the Ministry of Corporate Affairs (MCA) has imposed a penalty of ₹4,53,200 on a Private Limited Company and its directors for failure to file the Annual Return for FY 2020-21, as required under Section 92 of the Companies Act, 2013.
Key Reasons for the levy of Penalty:
Failure to File Annual Return
The company was required to file its Annual Return within 60 days from the date of its Annual General Meeting (AGM). The due date for filing was January 29, 2022, but the company did not file the return till August 19, 2024 (932 days of delay).
Show Cause Notice Ignored
MCA issued a Show Cause Notice (SCN) on August 19, 2024, asking the company and its directors to explain the reason for non-filing. The company as well as the directors did not respond and notices sent were returned back.
Adjudicating Officer’s Findings & Penalty Calculation
As per Section 92(5) of the Companies Act 2013, a company failing to file its Annual Return is subject to the following:
- ₹10,000 initial penalty
- ₹100 per day of continued delay, subject to a maximum of ₹2,00,000 for the company and ₹50,000 for each officer in default.
Since the delay lasted 932 days, the total penalties imposed were:
- Company: ₹1,03,200
- Each of the 7 Directors: ₹50,000 each
- Total Penalty Payable: ₹4,53,200
What Happens If the Penalty Isn’t Paid?
As per Section 454(8) of the Companies Act, if the penalty isn’t paid within 90 days,
- The company may face a fine of ₹25,000 to ₹5,00,000.
- Directors may face imprisonment of up to 6 months or a fine of ₹25,000 to ₹1,00,000 or both.
Next Steps for the Company:
The penalty must be paid via the MCA Portal within 60 days. The company must file Form INC-28 along with proof of payment.
The relevant order is enclosed below for your reference.
What is an Annual Return?
An Annual Return is a statutory document that every company is required to file with the Registrar of Companies (ROC) under Section 92 of the Companies Act, 2013. It provides a snapshot of the company’s structure, financial position and status of compliance at the end of the financial year. Filing the Annual Return is a crucial regulatory requirement to ensure transparency and corporate accountability.
Key details included in an Annual Return:
The Annual Return must be prepared in the prescribed format and include the following details at the end of the financial year:
- Company Information: Registered office address, principal business activities and details of its holding, subsidiary and associate companies.
- Shareholding and Securities: Information about shares, debentures and other securities, along with the shareholding pattern.
- Members & Debenture Holders: List of members and debenture-holders, including any changes since the previous financial year.
- Management Details: Names and details of promoters, directors and key managerial personnel (KMP), including changes since the previous financial year.
- Meeting Records: Details of Meetings of Members or a class thereof, Board and its various Committees and attendance details.
- Remuneration Details: Compensation paid to directors and key managerial personnel.
- Penalties & Legal Matters: Any penalties, punishments, compounding of offences and appeals made against such penalties or punishments.
- Compliance Certifications & Disclosures: Matters relating to regulatory compliance and mandatory disclosures.
- Foreign Investment: Details of shares held by or on behalf of Foreign Institutional Investors (FIIs).
- Other Prescribed Matters: Any additional information as mandated by law.
Who Should Sign the Annual Return?
- For Companies (other than OPCs & Small Companies): The Annual Return must be signed by a Director and the Company Secretary. If there is no Company Secretary, it must be signed by a Practicing Company Secretary (PCS).
- For One-Person Companies (OPC) & Small Companies: The Annual Return shall be signed by the Company Secretary. If a Company Secretary is not appointed, the Director can sign the Annual Return.
- For Listed Companies & Companies with Prescribed Paid-Up Capital and Turnover: For Listed Companies & Companies with prescribed Paid-Up Capital and Turnover: The Annual Return must be certified by a Practicing Company Secretary (PCS), confirming that the return discloses all facts correctly and adequately and that the Company has complied with all the provisions of the Companies Act.
Annual Return Disclosure on Website
If a company has a website, a copy of the Annual Return must be placed on the website. The web link to the Annual Return should also be disclosed in the Board's report.
Deadline for Filing Annual Return
- Every company must file its Annual Return with the ROC within 60 days from the date of the Annual General Meeting (AGM).
- If an AGM is not held, the company must still file the Annual Return within 60 days from the date on which the AGM was supposed to be held, along with a statement explaining the reason for not holding the AGM.
Note: Every company, except One Person Companies (OPCs), must hold an AGM within six months from the end of the financial year. If the financial year ends on March 31, the AGM must be conducted on or before September 30 of each year.
Forms for Filing Annual Return
For filing Annual Returns with MCA, companies need to submit the following forms under the Companies Act 2013:
- MGT-7: Applicable to all companies except One Person Companies (OPC) and Small Companies.
- MGT-7A: Simplified Annual Return Form for One Person Companies (OPC) and Small Companies.
Penalty for Non-Filing of Annual Return
If a company fails to file the Annual Return on time, penalties are imposed as follows:
- Company: Penalty of ₹10,000 plus ₹100 per day of continued non-compliance (Maximum Penalty ₹2,00,000).
- Officers in Default: Penalty of ₹10,000 plus ₹100 per day of continued non-compliance (Maximum Penalty ₹50,000 per officer).
Penalty for False Certification by a Company Secretary: If a Company Secretary in Practice (PCS) falsely certifies the Annual Return in violation of Section 92, they will be liable for a penalty of ₹2,00,000.
We have appended below a table summarising the provisions related to Penalty for ready reference:
Nature of Violation | Person liable | Penalty |
Failure to file Annual Return | Company | Rs. 10,000 + Rs. 100 per day of delay (Max: Rs.2,00,000) |
Failure to ensure filing of Annual Return | Officers in Default | Rs.10,000 + Rs.100 per day of delay (Max: Rs. 50,000 per officer) |
False certification of Annual Return | Company Secretary (PCS) | Rs. 2,00,000 |
Lesson for Companies: Compliance is Crucial!
Non-compliance with MCA regulations can lead to severe financial penalties, legal complications and even imprisonment for directors. To avoid such risks, timely filing of the Annual Return is essential. If your company hasn’t filed its Annual Return yet, act now to avoid unnecessary penalties and legal troubles!
How to File an MCA Annual Return?
Follow these steps to successfully file your Annual Return with the Ministry of Corporate Affairs (MCA):
Step 1: Download the Required Forms
- Go to the MCA website and navigate to MCA Services ⏩ Company E-filing ⏩ Company Forms Download.
- Download the applicable forms: MGT-7 / MGT-7A (For Annual Return filing)
Step 2: Fill & Prepare the Forms
- Complete the relevant E-forms for your company. Attach the required PDF/XML documents as per the form’s instructions.
- Click "Check Form" to validate the details.
- Attach the Digital Signature Certificate (DSC) of the Director and Practicing Professional (if applicable). Click "Pre-Scrutiny" to verify the form.
Step 3: Register & Log In to MCA Portal
If you haven't registered yet, sign up as a Business User or Registered User on the MCA portal. Log in with your MCA credentials to proceed.
Step 4: Upload the Signed E-Forms
Navigate to "Upload E-forms" on the MCA portal. Browse and select the filled and digitally signed form from your system. Click Upload to submit the form.
Step 5: Payment Process
Once the form is uploaded, a SRN (Service Request Number) will be generated. Proceed to the payment window and choose one of the following options:
- Pay Later: Save the challan and complete the payment before the due date.
- Pay Now: Use internet banking, debit/credit card to complete the transaction immediately.
- Save the payment challan for future reference.
Step 6: Track Your Filing Status
You can track your form’s transaction status using the SRN under the MCA Services menu. Enter the SRN number generated in the challan to check whether your form is approved or pending approval.
Once approved, your Annual Return filing is complete!
Find the Steps Too Complex? Let IndiaFilings Experts Handle It for You!
Why is Filing the Annual Return Important?
Filing your Annual Return is a crucial legal obligation that ensures your company remains compliant, transparent and in good standing with regulatory authorities.
- Legal Compliance: Ensures adherence to the Companies Act, 2013 and avoids regulatory violations.
- Transparency & Corporate Governance: Provides a clear record of the company's structure, financials and management details.
- Avoids Penalties & Legal Consequences: Late or missed filings attract hefty penalties and may lead to legal action against the company and its directors.
- Maintains Good Standing: Helps the company remain compliant with ROC & MCA regulations, ensuring smooth business operations and credibility.
Avoid last-minute stress – file your Annual Return on time!
Avoid MCA's Hefty Penalty – File Your Annual Return with IndiaFilings Today!
If your company hasn’t filed its Annual Return yet, now is the time to take action! Delayed filing can result in hefty penalties.
- Our experts handle the entire MCA compliance process.
- Hassle-free filing to keep your company 100% compliant.
- Avoid penalties, legal troubles & non-compliance risks.
Contact IndiaFilings today & file your Annual Return before it’s too late!
FAQs on Annual Return Filing & MCA Compliance
1. What is an Annual Return under the Companies Act 2013?
An Annual Return is a statutory document that provides details about a company’s structure, management, shareholders and status of compliance at the end of a financial year. It must be filed with the Registrar of Companies (ROC) under Section 92 of the Companies Act 2013.
2. Who is required to file the Annual Return?
All Private Limited, Public Limited and Listed Companies must file an Annual Return (MGT-7). However, One Person Companies (OPCs) and Small Companies use a simplified return (MGT-7A).
3. What are the key forms required for Annual Return filing?
- MGT-7: For all companies except OPCs and Small Companies.
- MGT-7A: For One-Person Companies (OPCs) and Small Companies.
4. What is the deadline for filing the Annual Return?
The Annual Return must be filed within 60 days from the date of the Annual General Meeting (AGM). For companies whose financial year ends on March 31, the AGM should be conducted by September 30, making the Annual Return due by November 29.
5. Who can sign the Annual Return?
- For Companies (other than OPCs & Small Companies): A Director and Company Secretary (CS) (or a Practicing CS if no CS is available in the company).
- For OPCs & Small Companies: CS should sign the return. The Director can sign if there is no CS.
- For Listed Companies & Large Entities: A Practicing Company Secretary (PCS) must certify the return.
6. Can a company be shut down for not filing its Annual Return?
Yes. Continuous non-filing of Annual Returns can result in the company being struck off by the ROC. Directors of such companies may also be disqualified from holding directorships in other companies.
7. What is the penalty for false certification of an Annual Return?
If a Company Secretary in Practice (PCS) falsely certifies the Annual Return, he faces a penalty of ₹2,00,000.
8. What should a company do if it has missed the Annual Return filing deadline?
The company should immediately file the overdue return with the additional fees. If notices have been issued by MCA, seeking professional assistance is recommended to avoid legal consequences.
9. How can IndiaFilings help with Annual Return filing?
IndiaFilings provides end-to-end support for Annual Return filing, compliance management and penalty avoidance. Our experts ensure your filing is error-free, timely and MCA-compliant so you can focus on growing your business.
Still have questions? Contact IndiaFilings today for expert guidance on Annual Return filing!
About the Author
RENU SURESHRenu Suresh is a proficient writer with a knack for turning intricate legal concepts into clear, actionable advice. Her articles empower entrepreneurs by providing the knowledge they need to navigate the complexities of business laws, ensuring they can start and manage their businesses effectively.
Updated on: February 27th, 2025
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