Role of Section 92 of Companies Act 2013

Every company in India whether public or private shall file an annual return to comply with the Income Tax Act not only this, but the filing of the annual return shows the growth of the company in the few last years. It also states the profitability of the company that a company is gaining profit year by year or is at a break-even position or in loss. Such non-compliance can impose penalties on the company or on the officer of the company who’s at fault. Also, an annual return shall consist of or reveal some important information regarding the return to the company on the investment made by the company.

What type of company is bound to file the annual return? The companies who are the listed company, or that such company having a paid-up capital of 10 crores or more, or such companies whose turnover is of 50 crores in a year or more than that, such companies shall file the annual return. Which shall be signed by the director of the company, and certified by the company secretary in practice.

The annual return filed by the company and certified by the company secretary, that annual return’s certificate shall be in Form No. MGT-7 which shall be stating the annual return discloses all facts and the company has complied with all provisions of the Companies Act, 2013.

What if the Annual return is not filed on time? The ‘Annual Return’ shall be filed within 60 days from the date on which the ‘AGM’ (annual general meeting) was held or in case no AGM (annual general meeting) was held then it shall be counted from the date on which date the annual general meeting was likely to hold including the reason for not happening of the annual general meeting.

If the company or any officer of the company is at default or was not able to file the “Annual Return’ on time or the copy of the annual return was not submitted to the company’s Registrar then the company and the officer responsible shall be held liable for penalty of 10 thousand rupees and for the continues default 100 rupees per day, the maximum of the penalty for the company can go up to 2 lakh rupees where the maximum penalty for the officer of the company shall be liable up to 50 thousand rupees.

The failure to file the annual return is not limited to only a fine, other restrictions are to be imposed on the company. If a company fails to file the annual return on time, then the company shall not buy directly or indirectly shares of its own company or other securities. Failure to reappoint as the director if the director fails to file the annual return for the previous three preceding years.  If the company fails to file annual return for consecutively two years, then the respective Registrar shall issue a notice to the company for entering the company’s name in the ‘Dormant Company’ under sub-section (4) of section 455 of the Companies Act, 2013. The company will face issues any changing the name if it's important from the aspect of acquisition that the company failed to file an annual return and will not be able to make the changes in the name of the company.