The consequences of not filing annual return can vary depending on\nthe country and the type of organization involved. In many cases, failure to\nfile an annual return can result in penalties, fines or can attract legal\nactions against the organization or its directors. In this article we shall about\nthe consequences of not filing annual return on time.<\/p>\n\n\n\n
Each year a company shall file their book of accounts and annual\nreturns of the company with the MCA. A company shall commits to an offence if\nthey does not file the annual return each year as per the provisions of Companies Act, 2013<\/strong>[1]<\/strong><\/a><\/sup>.\nThus it is mandatory for a company to file for the annual returns within 60\ndays after the Annual General Meeting and also file for the financial statement\nby 30 days.<\/p>\n\n\n\n Under the Companies Act, there are different forms that need to be\nfiled for filing annual returns of a company, depending on the type and size of\nthe company. Below are the forms that are generally required to be filed:<\/p>\n\n\n\n Here are some possible consequences of not filing annual return:<\/p>\n\n\n\n Late filing penalties can accrue when an organization fails to\nsubmit its annual return on time. These penalties can increase over time and\ncan be quite significant.<\/p>\n\n\n\n Failing to file an annual return can result in a loss of good\nstanding with regulatory bodies or governing bodies, which can have serious\nconsequences for an organization. For example, it may affect the organization\u2019s\nability to access funding or receive regulatory approvals.<\/p>\n\n\n\n In some cases, failure to file an annual return can result in legal\naction against the organization or its directors. For example, directors may be\nheld personally liable for any losses incurred as a result of the\norganization\u2019s failure to file.<\/p>\n\n\n\n Organizations that fail to file their annual return may also risk\nlosing their tax-exempt status. This can result in significant financial\nconsequences for the organization and its donors.<\/p>\n\n\n\n Many funders require organizations to be in good standing and\nup-to-date with their annual filings before considering them for funding.\nFailure to file an annual return can, therefore, make it difficult for\norganizations to access funding.<\/p>\n\n\n\n If a company hasn’t filed its annual return for a subsequent\nperiod of two years, it will be deemed to be an “inactive company,”\nand it will be presumed that the specific business has closed as a result. In\nsuch a case, the company’s bank account may be closed, and the registered agent\nmay also send the company a notice and begin the process of removing the\ncompany from MCA records.<\/p>\n\n\n\n Failure to file annual returns can result in directors\nbeing held personally liable for the company\u2019s debts and liabilities. In case\nof default in filing both the forms (MGT-7 & AOC-4) consecutively for three\nyears, then the director shall be liable for disqualification to be re-appointed\nin the same company or may not be appointed as a director in some other company\nfor the next five years, from the date the company fails to file with the\ncompliance.<\/p>\n\n\n\n Overall, not filing an annual return can have serious consequences for an organization and its directors. It is therefore important to ensure that all annual returns are filed on time and in accordance with regulatory requirements.<\/p>\n\n\n\nDifferent Forms\nThat Need To Be Filed For Annual Returns<\/h2>\n\n\n\n
Consequences of\nNot Filing Annual Return by the Company<\/h2>\n\n\n\n
\n Sl. No.<\/strong>\n <\/td> \n Time of Delay<\/strong>\n <\/td> \n Amount charged as Penalty<\/strong>\n <\/td><\/tr> \n 1.\n <\/td> \n Sections\n (93, 139 and 157) if delayed by 15 days\n <\/td> \n 1\n times of the Normal fee\n <\/td><\/tr> \n 2.\n <\/td> \n Sections\n (93, 139 and 157) if delay is between 15 days and 30 days\n <\/td> \n 2\n times of the Normal fee\n <\/td><\/tr> \n 3.\n <\/td> \n If\n delay is more than 30 days and less than 60 days\n <\/td> \n 4 times\n of the Normal fee\n <\/td><\/tr> \n 4.\n <\/td> \n If\n delay is more than 60 days and less than 90 days\n <\/td> \n 6\n times of the Normal fee\n <\/td><\/tr> \n 5.\n <\/td> \n If\n delay is more than 90 days and less than 180 days\n <\/td> \n 10\n times of the Normal fee\n <\/td><\/tr> \n 6.\n <\/td> \n If\n delay is more than 180 days and less than 270 days\n <\/td> \n 12\n times of the Normal Fee\n <\/td><\/tr> \n 7.\n <\/td> \n If\n the delay is above 270 days\n <\/td> \n The second\n proviso to sub-section (1) of section 403 of the Act. (Penalty charged for Rs\n 100 per day after 270 days)\n <\/td><\/tr><\/tbody><\/table>\n\n\n\n Conclusion<\/h2>\n\n\n\n