Learn why timely filing of MGT-07 & AOC-04 form is crucial

Maintaining regulatory compliance becomes paramount for businesses in the financial landscape. A recent case study has highlighted the importance of timely compliance filing for companies in India. The Ministry of Corporate Affairs (MCA) levied a hefty fine of ₹40 lakhs on a company for failing to submit MGT-07 and AOC-04 forms within the stipulated deadlines. 

This incident emphasises the significant financial consequences associated with non-compliance. By understanding the filing requirements and penalties for late submissions, businesses can take proactive steps to ensure the timely filing of MGT-07 and AOC-04 forms.

MGT7 & AOC4 Penalty for non filing_DataTracks - Case Study

Read more:  Case Study – Penalty for late filing MGT-07 and AOC-04 forms

Understanding the Penalties for Non-Compliance

Annual Return in MGT-07

Section 92 of the Companies Act 2013 highlights that companies must file the annual return using MGT-07 with the Registrar of Companies (ROC) within 60 days of conducting its Annual General Meeting (AGM). Missing this deadline incurs penalties as follows:

  • Initial Penalty: A daily fine of ₹100/day applies to both the company and its directors.
  • Fixed Penalty: A fixed penalty of ₹50,000 is imposed on the company and concerned officers for non-compliance.
  • Maximum Penalty: If the non-compliance further delays, an additional penalty of ₹100/day is levied, capped at a maximum of ₹5,00,000.

Financial Statements via AOC-04

Under Section 137 of the Companies Act 2013, it is mandated for companies to file their financial statements using Form AOC-04 XBRL with the ROC within 30 days of their AGM commencement. Late filing of AOC-04 attracts the following penalties for the company:

  • Daily Penalty: A daily fine of ₹1,000 is imposed, capped at a maximum of ₹10,00,000.
  • Officer Penalty: The company’s Chief Financial Officer (CFO), Managing Director (if applicable), or directors overseeing AOC-04 compliance can be penalised up to ₹1,00,000.
  • Additional Penalty: Persistent non-compliance leads to a further daily penalty of ₹1,000, capped at a maximum of ₹5,00,000.

Why is Timely Filing of MGT-07 and AOC-04 forms Important?

Timely filing of MGT-07 and AOC-04 goes beyond avoiding penalties. It demonstrates a company’s commitment to transparency and good governance. These filings are crucial for various stakeholders, including investors, creditors, and regulatory bodies. 

Staying compliant offers several benefits:

  • Maintains Credibility: Timely filings project a positive image to stakeholders, fostering trust and confidence.
  • Avoids Legal Hassles: Late filing can lead to legal proceedings and reputational damage.
  • Facilitates Business Growth: Compliance promotes a smooth business environment, enabling easier access to credit and potential partnerships.

Why Choose Data Tracks For Financial Reporting in XBRL Format?

Convert your financial statements into a standardised XBRL report, which is an efficient way to communicate your financial data. This standardised XBRL format allows for easier analysis and comparison by investors, regulators, and other stakeholders. Consider DataTracks to prepare compliance reports in XBRL format for filing with the MCA. 

Our team stays up-to-date on the latest MCA XBRL filing requirements, ensuring your filings are accurate and compliant. With our meticulous tagging process, we minimise the risk of errors that could delay your filings. For further information, email enquiry@datatracks.in or call us at +91 73050 74307.

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