Company Annual Return can now be filed online. The contents of this annually published document cover almost everything that you must know about a firm. In this article, we have shared the process of filing a company annual return.
Overview
An Annual Return is a publicly disclosed document generated by an organisation or business every year showcasing the key transactional metrics that must be noted at the end of the fiscal year. This has to be filed in association with the Ministry of Corporate Affairs. A Company Annual Return is not a detailed financial report; instead, it provides general data regarding its activities in the past year. This documentation reveals facts about the organisation’s members and other relevant data. Every company needs to produce this each year without fail.
Company Annual Return Filing Checklist
A list of documents must be produced by each Company With Compliance to the MCA or Registrar of Companies if the business proceedings of the firm are legally laid under the 1956 Companies Act.
These Documents Include
- Income Statement or P&L Account: All firms must e-file Form 21A.
- Balance Sheet: The enterprises are asked to file Form 23AC to serve this purpose.
- Annual Return: Companies that hold share capital must file Form 20B. If the firm does not have a share capital, then it will file Form 21A only.
In addition to all the above documents, all the companies must file Form 66, which has utilised an operational capital of up to ₹5 crores or more than ₹10 lakhs.
These steps can be followed easily by visiting the official website of MCA.
Company Annual Return – Contents
Annual Return filed by a Company enlists all key aspects of the firm’s business, including information about its Board of Directors, hare capital, transference of dictatorship, indebtedness, company’s public disclosures and so on.
Each company is bound to generate its annual return after 2013’s Companies Act has strictly applied the rules. This filing must be completed before 29th November each year with the RoC or Registrar of Companies to avoid lawsuits involving investment or interest disputes.
In the next section of this blog, we will briefly brush up on all the subjects that are addressed by a company when it prepares the annual return.
Company Registration Details: This section sums up the basic information of the enterprise like
- Registration number
- CIN
- Global Location Number or GlN
- Stock exchanges enlisting shares of this particular company
- Company category
- Company subcategory
- The date on which AGM was held. If it is not done yet, what is the tentative deadline.
Insights of the Registered Office: This portion displays the company’s commercial name and the registered office’s address.
Company Annual Return: Other details covered under this head include
- Official website link of the company
- Official mail ID
- Telephone numbers
- The police station that is local to the company’s established office
- Registrar’s address and identity details of Transfer agents
- In the case of a company whose origin is seeded overseas, the principal business location within India needs to be mentioned (complete address)
Company Annual Return – Next, what comes into account while analysing a company’s annual return is the business’ key commercial ventures during the past year that has resulted in 10% or excess of the firm’s annual turnover.
Specifications of holding and list of associated companies: Each of the associated business entities must be duly stated with their corresponding
- CIN or GLN. GLN comes into play when the company holds stakes in a foreign business
- Relationship status (holding, associated company or subsidiary)
- Holding ratio and applicable areas
Complete list of company assets: This section again sums up a range of information like the firm’s capital structure, specifications of a stock split during the financial year, the total amount of non-convertible, fully convertible and partially convertible debentures as per the Annual General Meeting, total market value, number of shares, the minimum price of a share, list of other securities, etc.
Details of Turnover: This area of the annual return addresses the company’s net worth besides its turnover.
Breakup of equity: Here, we can learn about the company’s list of promoters, percentage of public holding, change in shareholding of promoters, Custodian for ADRs and GDRs, shareholding stats of all key managerial entities, including that of the Directors and lastly, the percentage of shares that still happen to exist in physical form.
Indebtedness: As the name indicates, this portion lists all the debts of a firm like loans (this does not cover deposits), unsecured loans, cumulative debt at the start of the present fiscal year, modifications noticed throughout the year and finally, indebtedness when the year eventually closes.
Apart from the details mentioned above, another ten key particulars are shared over the company’s annual return; these are as follows:
- Information about debenture holders and business members
- Knowledge about the shares transferred since the closing of the past fiscal year
- Particulars of company founders or promoters typically mention the designation of the person, role (whether executive or non-executive), and lastly, the number of promoters.
- Brief knowledge of Company Directors
- Details of key management personnel
- Outcomes of Board meetings/meetings held among members/meetings organized across Committees
- Directors’ stance in those meetings
- Managing Directors’ remuneration. The amount is a cumulative figure evaluated by combining gross salary, commission, sweat equity, stock option, etc.
- Punishing guidelines in case of breach of conduct/ company policies
- Disclosure of matters concerning certification of compliances
- Information about shares which are owned by FIIs or Foreign Institutional Investors
In addition to all of the above data, there are other vital disclosures; this includes the declaration of dividend, Directors’ disclosure, Corporate Social responsibility, CSR investments for that particular financial year and so on. One must note that whether to share the excess profit as divided or not is a decision of the company; the law does not compel the owners to pay a dividend.
The Process of Filling the Contents of the Annual Return
- Download the prescribed format of the Data Structure File, available under the IT Division’s official webpage’s Tax Information Network.
- AIR RPU is a recommended software tool that assists in filing a company’s annual report. Either use it or some third-party software to fill this annual form following the guidelines set by MCA.
- NSDL’s File Validation Utility facility can verify the file first to check for possible errors.
- The error-free document is successfully forwarded, and a copy is retained for future purposes. A finished Part A – Form 61A has to be delivered to a TIN-FC along with the Annual return. This form is readily available over the internet.
Conclusion
Company Annual Return – The format of the company’s annual return is vividly shared on the official web page of the Ministry of Corporate Affairs: https://www.mca.gov.in/MinistryV2/classification+and+registration+of+companies.html. The return needs to be filed within 60 days of the AGM date by a firm. The annual return filing has been mandated since 2013 by Section 92 of the Companies Act.
To know more about such key statements, check out Vakilsearch’s latest articles on tax filing, various registration laws, and accounting insights.
