Consequences of not filing Annual Return with ROC – Form MGT 7

In our previous article, we have discussed when and how to file company’s annual return and signing of annual returns. In this article, we will be discussing the consequences of not filing Annual Return.

As per section 92 of Companies act 2013, every company shall prepare an annual return in form MGT-7 containing details as on 31st March of the financial year. It must be filed on or before 60 days from the date of AGM.

consequences for not filing annual return

To know the consequences of not filing company’s annual return, you must look into the provisions of section 92, 164, 271 and 455 of companies Act 2013. Let us discuss relevant provisions of these sections.

Section 92 – Liability of Directors and Company for not filing Annual Return

As per section 92 of Companies act 2013, 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 as applicable then;

  • every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 9 months or
  • with fine which shall not be less than 50,000 rupees but which may extend to 5 Lakh rupees, or with both

Section 92 of Companies Act 2013, also specifies the liability of the company for not filing Annual Return. As per this section, 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 fifty thousand rupees but which may extend to five lakhs rupees

Consequence for continuous default in filing annual return

As per section 164 (2) of Companies Act 2013, If the company has not filed its Annual Return for continuous period of three 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 five years from the date on which the said company fails to do so.

As per section 271, if the Company has defaulted in filing Annual returns for the consecutive five previous financial years, the Company may be wound up by the Tribunal.

Section 455 talks about the company which can be termed as inactive or dormant for not filing its annual return. According to this section, if the Company has not filed its Annual Return for last two financial years, it will be termed as “inactive company”. If the Company has not filed its Annual Return for two financial years consecutively, the Registrar shall issue a notice to the Company and enter its name in the Register of Dormant Companies.