MCA Imposes ₹3.50 Lakh Penalty for AOC-4 Non-Compliance
MCA Imposes ₹3.50 Lakh Penalty for AOC-4 Non-Compliance
Once a company is incorporated, the Directors are responsible for ensuring that the company files various regulatory and statutory filings on time. Failure to submit the annual financial statements through AOC-4 can lead to severe penalties, including the possibility of disqualifying Directors from starting new ventures. A recent case in West Bengal, where the Ministry of Corporate Affairs (MCA) levied a fine of ₹3 lakhs for non-compliance, underscores the seriousness of AOC 4 Filings.In this article, we’ll explore the details of AOC-4 filings and delve into the circumstances leading to imposing a ₹3.5 lakh penalty on a company.
If your company hasn’t filed its AOC yet, contact IndiaFiling’s experts to ensure compliance and avoid fines. Get Started!
What is AOC-4?
AOC-4 is a form companies registered in India must file with the Ministry of Corporate Affairs (MCA) as part of their annual compliance requirements. It is used for submitting the company’s annual financial statements, which include the balance sheet, profit and loss account, and director’s report for a given financial year.
This filing is mandatory under the Companies Act 2013 and is crucial for maintaining transparency and accountability in the company’s financial affairs to the stakeholders and the Ministry of Corporate Affairs (MCA).
Who Needs to File Form AOC-4?
- Every Company: All companies must file their financial reports with Form AOC-4.
- Special NBFCs: NBFCs that follow specific accounting standards must use special versions of Form AOC-4 for their financial reports.
- Companies with CSR Duties: Companies that must do Corporate Social Responsibility (CSR) must include a special CSR report with their AOC-4 form.
- Companies Required to File in XBRL Format: Certain companies must file their financial statements in XBRL (Extensible Business Reporting Language) format using AOC-4 XBRL. This includes:
- Listed companies and their Indian subsidiaries.
- Companies with a capital of ₹5 crores or more.
- Companies with a turnover of ₹100 crores or more.
- Companies that must prepare their financial statements as per the Companies (Indian Accounting Standards) Rules, 2015.
Due Date For Filing
The due date for filing Form AOC-4 is within 30 days of the company’s Annual General Meeting (AGM).
Typically, companies must hold their Annual General Meeting (AGM) within six months from the end of their financial year. For most companies in India, the financial year ends on March 31, making the latest allowable date for the AGM September 30. Consequently, given the 30-day filing period post-AGM for Form AOC-4, the standard deadline for submitting this form would indeed fall on October 29 of the relevant assessment year.
Late Fees for Delayed Filing of Form AOC-4:
| Period of Delay | Additional Fee Payable |
| Delay beyond the due date (30 days post-AGM) | ₹100 per day |
Penalties for Non-Filing of Form AOC-4
| Defaulting Party | Penalty Imposed |
| Company | Base penalty of ₹10,000 + ₹100 for each day of default, up to a maximum of ₹2 lakhs |
| 1. Managing Director/Chief Financial Officer | Base penalty of ₹10,000 + ₹100 for each day of default, up to a maximum of ₹50,000 |
| 2. Other Director assigned responsibility in the absence of MD/CFO | Base penalty of ₹10,000 + ₹100 for each day of default, up to a maximum of ₹50,000 |
| 3. All directors (in the absence of a specifically assigned director) | Base penalty of ₹10,000 + ₹100 for each day of default, up to a maximum of ₹50,000 |
Case Study: MCA’s ₹3.50 Lakh Penalty for AOC-4 Non-Compliance in West Bengal
Under the Ministry of Corporate Affairs, the West Bengal Office of the Registrar of Companies has recently issued an enforcement order to address violations of Section 137 of the Companies Act, 2013. This action, taken on February 5, 2024, pertains to the mandatory submission of financial statements, as outlined by the Companies Act, 2013, and further reinforced by the penalties specified in the 2014 and 2019 amendments of the Companies (Adjudication of Penalties) Rules. This measure specifically targets those companies that have failed to adhere to the rule of submitting their financial statements on time.
- Appointment of Authority: An Adjudicating Officer was appointed on March 24, 2015, by the Ministry to enforce penalties under the Companies Act 2013, particularly for ensuring that companies submit their financial statements correctly and on time.
- Non-Compliance Details: A specific incident involved a company failing to submit a readable version of its financial statements for the fiscal year ending on March 31, 2016, through E-Form AOC-4. This non-compliance directly contradicts the requirements in Section 137 of the Companies Act, which mandates the submission of financial statements within a specified period after the annual general meeting.
- Adjudication and Penalty: Despite the company’s appeal for leniency, citing management transition and technical glitches as reasons for the oversight, the Adjudicating Officer upheld the law’s stringent requirements. Consequently, a penalty of ₹3.50 lakh was imposed on the company, including its current and former directors, calculated from the due date of the filing to the date of adjudication.
Compliance Reminder: This penalty highlights the critical nature of compliance with filing requirements. The MCA stresses the importance of timely fine payment and outlines the appeals process, highlighting the legal responsibilities of companies and their management.
Click here to learn How to Avoid AOC-4/MGT-7 Filing Penalties.
Conclusion
This enforcement action underscores the importance of transparency and accountability in corporate governance. Specifically, the crucial role of AOC-4 filings in maintaining this transparency. E-Form AOC-4 is vital for stakeholders to assess a company’s financial health and operational integrity.
Submitting financial statements through E-Form AOC-4 isn’t just a formality; it’s key for showing a company’s true financial state and building trust with everyone involved, from investors to the public. This case is a clear message: follow the rules and file your reports properly or face serious consequences. It’s all about keeping business transparent and accountable.
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If your company has yet to file the AOC-4 form, it’s crucial to act immediately to avoid penalties. Our experienced professionals are here to guide you through the filing process, ensuring compliance with the Ministry of Corporate Affairs’ regulations. Don’t risk fines or legal issues – contact our experts and get your AOC-4 filed today! Get Started!
