Consequences of not filing Annual Return
An Annual Return is the most important document that is to be filed by every company with the Registrar of companies as this one document reflects the company performance on the close of the financial year. Annual return has to be filed with the RoC within 60 days from the date of Annual General Meeting (AGM). If the AGM is not held in any year, the return has to be filed within 60 days from the date on which AGM should have been held together with the statement specifying the reasons for not holding the AGM, on payment of such fee or additional fee as prescribed (Rule 12 of the Companies (Registration Offices and Fees) Rules, 2014. Similarly, the responsibility cannot be abandoned even if the company is inoperative except for the case where the company has been woundup or its name struck-off from the Register maintained by the Registrar of Companies, then the business need not file its annual returns. In this blog we intend to help business owners understand the Consequences of not filing Annual Return alias ‘RoC filing’.
Scenario when a company does not file Annual Returns:
Case 1: We will analyse the situation where the company has not filed its Annual Return before the expiry of a period of 270 days from the date by which it should have been filed with fee and additional fees
Director can be punished with imprisonment for a term which may extend to 6 months or with fine which shall not be less than INR 50K but which may extend to INR 50L, or with both (Section 92)
Case 2: If the company has not filed its Annual Return for continuous period of 3 financial years, then every person who is or has been director of that company shall not be eligible for re-appointment as Director of that company or appointed in any other company for a period of 5 years from the date on which the said company fails to do so.
Case 3: If in Annual Return, any Director or any Person makes a false statement or omits any material fact
Directors can be punished with imprisonment for a term which shall not be less than 6 months but which may extend to 10 years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud.
Case 1: If the company has not filed its Annual Return before the expiry of a period of 270 days from the date by which it should have been filed with fee and additional fees, the company shall be punishable with fine which shall not be less than INR 50K but which may extend to INR 15L
Case 2: If the Company has defaulted in filing Annual returns for the consecutive 5 previous financial years, the Company may be wound up by the Tribunal.
Given the seriousness of the RoC filing, business owners should consider filing their Annual Returns. We at Wazzeer can help you get RoC filing done seamlessly let’s connect.