Section 92 of Companies Act. Annual Return

“(1) Every company shall prepare a return (hereinafter referred to as the annual
return) in the prescribed form containing the particulars as they stood on the close of the financial year regarding—
(a) its registered office, principal business activities, particulars of its holding, subsidiary and associate companies; (b)…

…

6) If a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made thereunder, he shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.“

What’s annual return?

Annual return is the return that has been generated over the preceding year. That all the investment made by the company. If the return on the investment is more than the investment than it is said to be ‘Gain’ or if the return on the investment is low it is said to be ‘Loss’. The annual return involves the factor like risk involving in the return, hence the return on investment vary as the risk also varies on each investment to investment.

Important aspects in Section 92 of Companies Act

Registered Office Addresses: That there shall be mentioning of the registered office address of the company. And the other branches of the company if any.

Liabilities of the company: That there shall be the mentioning of the liabilities of the company. That what are the liabilities that the company is bound by them. Liabilities can be more than of the return gained, it totally varies. New allotments: If there is any new issuance of the shares made by the company then it shall be there in the annual return, that there shall be a proper mentioning of the new members if any.

Penalties on company: That running a company is not easy, it’s not a piece of cake there is many challenges that to be faced by the company. That many times a company or their officers fails to comply with the provisions of this act and due to which there are penalties imposed on the company. The default is not intentionally most of the time due to the workload the company falls at default. Hence in annual return there shall be mention of such penalties if imposed on the company. Acquisition by the company: If the company has acquired any other company in the preceding year, then there shall be complete information regarding the acquisition made by the company.

Listing of the Members, Investors & etc.: There shall be consisting a list for the name of the Shareholders of the company, debenture-holders, and the investors if joined in that preceding year. In short, there shall be name of the company’s members and their title of which rights they’re holding of in the company.

Maintenance of the records: That the company shall maintain such record filed to the Registrar by the company for the last 8 years, the maintaining of such record is an important aspect in regard to file the annual return. The maintenance of such records shows the growth of the company which is an important aspect.

Information regarding the investment made to the company: If there is been any investment made for the purpose of the company by the outside investors or foreign investors then there shall be such information about such investment made regarding the amount invested, the investment was made by whom i.e. name of the investment and other important information shall be disclosed.

Role of Section 92 of Companies Act 2013

That every company in India whether public or private shall file the 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 few last years. And 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. And such non-compliance can impose penalties on the company or on the officer of the company who’s in fault. Also, that a annual return shall consist or reveal some important information regarding the return to the company on the investment made by the company.

What type of company are bound to file the annual return? The companies who are the listed company, or that such company having the paid-up capital or 10 crores or more than that, 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 secretory in practice.

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

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

And if the company or any officer of the company be at default or were not able to file the “Annual Return’ on time or the copy of 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 be 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 fine, there are other restrictions that are to be imposed on the company. That 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 reappointed 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 an notice to the company for entering the company’s name in the ‘Dormant Company’ under sub-section (4) of section 455 of Companies Act, 2013. The company will face issue any changing the name if its important from the aspect of acquisition that the company failed to file annual return will not be able to make the changes in the name of the company.

FAQs

Q. Who will certify the ‘Annual Return’?

The company secretory in practice shall certify the annual report. The certificate is in Form No. MGT-8.

Q. What’s Section 92(2) of the Companies Act, 2013?

That the company having paid-up capital of 10 crore or the yearly turnover is of 50 crores minimally that company shall file annual return.

Q. Who signs the annual return of the company?

The annual return of the company shall be signed by the company secretory of the company or by the director if there is no company secretory.

Q. What’s ‘Annual Return’ as per Companies Act?

Annual return is a yearly statement for the financial position of the company and the growth of the company along with some other important aspect as well.

Q. Is there any copy of annual return to be given?

Yes, a copy of the annual return shall be given to the Registrar of the company within the 60 days from the date of annual general meeting.

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Section 92 of Companies Act 2013

Vaibhav Bhatt

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