10 April 2023
I have a Company whose financials as well as annual return in form AOC-4 and MGT-7 is not filed for past 2 years. Now, what procedure needs to be followed as regards adoption of financial statements, AGM and Filing of ROC Forms.
10 July 2024
When a company has not filed its financial statements (AOC-4) and annual returns (MGT-7) for two consecutive years, it's crucial to follow a specific procedure to rectify the non-compliance. Here’s a step-by-step guide on what needs to be done:
### 1. Convene an Annual General Meeting (AGM):
- **Convene the AGM:** The first step is to convene an Annual General Meeting of the company. Notice of the AGM must be sent to all shareholders, directors, and auditors of the company as per the provisions of the Companies Act, 2013 and the Articles of Association. - **Approval of Financial Statements:** At the AGM, the shareholders must adopt the financial statements (Balance Sheet, Profit and Loss Account, and other documents) for each of the past two financial years (for which the AOC-4 was not filed).
### 2. Filing of ROC Forms:
- **File AOC-4 Form:** After the adoption of financial statements at the AGM, file Form AOC-4 with the Registrar of Companies (ROC) for each of the past two financial years. This form includes the financial statements, Director’s Report, Auditor’s Report, and other required documents. - **File MGT-7 Form:** Alongside Form AOC-4, file Form MGT-7 containing the annual return (including information about shareholders, directors, meetings, etc.) for each of the past two financial years.
### 3. Compliance with Penalties:
- **Late Filing Fees:** Be prepared to pay late filing fees and additional penalties as per the Companies Act, 2013 for the delayed filing of AOC-4 and MGT-7 forms. - **DIN Disqualification:** Directors of the company may face disqualification from being appointed or reappointed as directors in other companies if the non-compliance continues for an extended period.
### 4. Obtain Approval and Signatures:
- **Board Resolution:** Obtain a Board Resolution approving the financial statements and authorizing a director to sign and file Form AOC-4 and Form MGT-7. - **Director’s Signature:** Ensure that the financial statements and other relevant documents are signed by a director and certified by a practicing Chartered Accountant.
### 5. Rectification of Non-Compliance:
- **Rectification of Default:** After filing the pending forms (AOC-4 and MGT-7), the company’s non-compliance status will be rectified with the ROC. - **Monitor Compliance:** Going forward, ensure timely compliance with the filing of AOC-4 and MGT-7 forms to avoid recurrence of non-compliance.
### 6. Additional Considerations:
- **Legal Advice:** If there are complexities or legal implications due to the delay in filing, consider seeking legal advice from a company secretary or a corporate lawyer. - **Regular Compliance:** Develop procedures to ensure regular compliance with statutory filings and obligations under the Companies Act, 2013.
By following these steps diligently and ensuring all necessary forms are filed with the ROC, the company can rectify its non-compliance and resume normal business operations without legal repercussions.
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