There are several compliances and filing requirements on companies in India. Some of them are annual filings, income tax return, auditor appointment, etc. All these are mandatory requirements and failure to comply can attract a penalty or action from the Ministry of Corporate Affairs (MCA) or the Registrar of Companies. In this article, we will talk about all the annual filings and compliances that you need to know after the incorporation of company.
The dates mentioned here are for the general financial years except FY 2019-20. Given the pandemic situation, dates are not fixed.
Annual Filings and Compliances after the incorporation of Company
Concerned about missing out on certain compliances or filings? Here is a detailed list of all that you need to know:
Obtaining the Certificate of Commencement of Business
All companies having a share capital and registered in India after November 2018, must compulsorily obtain the certificate of commencement of business. The company cannot start conducting business activities or exercising its borrowing powers unless it obtains this certificate. Further, the company must ensure that it applies and receives the certificate within 180 days from the date of incorporation of company.
Failure to comply:
If the company fails to obtain this certificate within 180 days, then there is a penalty of:
- 50,000 for the company
- 1,000 per day for each Director for every day of default. However, this cannot exceed an amount of Rs.1 lakh.
Appointment of Auditor after the incorporation of company
Section 139 of the Companies Act, 2013, states that a company is required to appoint an auditor within 30 days of incorporation of a company in the first meeting of the Board to hold the office till the first AGM. If the Board fails to appoint the auditor within 30 days, then the members of the company can appoint one within 90 days at an Extraordinary General Meeting. Thereafter, the company must appoint the Auditor \at the first Annual General Meeting. Further, he must hold the office till the sixth AGM (Annual General Meeting).
Income Tax Return after the incorporation of company
All companies are required to file the Income Tax Return on or before September 30th. A private limited company needs to file the return via form ITR 6. Also, Section 8 companies must use form ITR 7.
Ministry of Corporate Affairs Form AOC-4 after the incorporation of company
Form AOC-4 is used for filing financial statements with the Registrar of Companies for each financial year. If the company wants to file consolidated financial statements, then it must use Form AOC-4 CFS. The company must file form AOC-4. Further, it must do so within 30 days from the last date of its AGM held in the assessment year.
Delays or failure to comply
In case of a delay, companies are required to pay an additional fee of Rs.100 per day counted from the expiry of the due date.
Ministry of Corporate Affairs Form MGT-7 after the Incorporation of Company
Form MGT-7 is used for filing details of the annual return with the Registrar of Companies for each financial year. The Registrar maintains this e-form via the electronic mode based on the statement of correctness given by the company. The company must file form MGT-7 within 60 days from the date of its AGM held in the assessment year.
Delays or failure to comply
In case of a delay, companies must pay an additional fee of Rs.100 per day. The days are counted from the expiry of the due date.
DIR-3 KYC after the Incorporation of Company
Until recently, any person wanting to become a director in one or more companies could fill form DIR-3 as a one-time process. However, the Ministry of Corporate Affairs decided to update its registry and have mandated all directors with DINs allotted before March 31, 2018, to submit their KYC details every year via Form DIR-3 KYC. Directors must submit this form on or before April 30th of the relevant assessment year.
Delay or Failure to comply
In case the director does not file the form within the due date, the department marks his DIN as ‘Deactivated due to non-filing of DIR-3 KYC.’ To reactivate it, he needs to pay a fee of Rs.5000.
Any company that received goods or services from micro and small enterprises (MSMEs) with delays in payments to the MSMEs exceeding 45 days from the date of receipt of the goods or services, must file a half-yearly return with the Registrar of Companies via Form MSME-1. This form states the amount of payment due and the reasons for the delay. The companies must file the form on 30th April for the period from October to March. Also, the last date is 31st October for the period from April to September.
Failure to comply
If the company fails to file the form within 30 days from the due date or knowingly furnishes incorrect information, then it will attract a fine of up to Rs.25,000. Also, there can be imprisonment for every officer in the company for a term of up to six months OR a fine of Rs.25,000 (up to Rs.3 lakh) or both.
We hope that this article gave you a broad idea about the mandatory annual filings and compliances after the incorporation of company. While every year, the MCA comes up with newer compliances or changed dates, keeping these pointers in mind can help.