Companies (Amendment) Bill, 2017
having received the President’s Assent on the 3rd Day of
January, 2018 was published in the Official Gazette for general information to
the Public on the same date, i.e., on the 3rd Day of January,
2018 as COMPANIES (AMENDMENT) ACT, 2017 further amending the Companies Act,
2013.
The Amendment Act provided 93
amendments to various provisions of Companies Act, 2013.
Out of which the major amendments
include a change in the definition of significant influence, related party and
small company, defining the term joint venture, making the members severally
liable in case the number of members falls below the prescribed level for a
period beyond six month, simplification of private placement process, allowing
the Companies to issue shares at a discount to its creditors, allowing companies
to extend loan to their directors or related persons after fulfilling certain
criteria, relaxation for consolidating the financials of Joint Venture with the
Financials of the Company, relaxation with regard to taking condonation of
delay in filing satisfaction of charges, providing for maintaining a Register
of Significant beneficial owners in a company, relaxation to unlisted public
companies regarding the place of AGM, omission of certain disclosures from the
Annual Report, introduction of abridged form of annual return for one person
company and small company, replacing the requirement of approval of central
government for managerial remuneration above prescribed limits by approval
through special resolution, aligning disclosure requirements in the prospectus
with SEBI regulations and stringent penalties in case of non-filing of
financial statements and annual return.
Out of the major amendments
provided above, the one that is going to affect all the companies is amendment
to Section 403 that deals with fees for filing of any document with the
Registrar and shifting of the additional fees from a slab based structure to a
day based defaulting structure.
This article aims to provide a
detailed analysis about the sections on which the impact of the amendment shall
fall upon and their consequent effect upon the companies.
SECTION 92
Section 92 deals with the filing of
Annual Return with the Registrar of Companies by “Every” Company. The relevant
provisions read as follows:
Section 92 (4) : Every company
shall file with the Registrar a copy of the annual return, within sixty days
from the date on which the annual general meeting is held or where no
annual general meeting is held in any year within sixty days from the date on
which the annual general meeting should have been held together with the
statement specifying the reasons for not holding the annual general meeting,
with such fees or additional fees as may be prescribed, within the time as
specified, under section 403.
Thus, the Companies are required to
file their Annual Return within 60 days from the Date or Due Date of AGM.
SECTION 137
Section 137 deals with the filing of Adopted or Provisional Financial
Statements with the Registrar of Companies by “Every” Company. The relevant
provisions read as follows:
(1) A copy of the financial
statements, including consolidated financial statement, if any, along with all
the documents which are required to be or attached to such financial statements
under this Act, duly adopted at the annual general meeting of the company,
shall be filed with the Registrar within thirty days of the date of annual
general meeting in such manner, with such fees or additional fees as
may be prescribed within the time specified under section 403:
Provided that where
the financial statements under sub-section (1) are not adopted at annual
general meeting or adjourned annual general meeting, such unadopted financial
statements along with the required documents under sub-section (1) shall be
filed with the Registrar within thirty days of the date of annual general
meeting and the Registrar shall take them in his records as provisional till
the financial statements are filed with him after their adoption in the
adjourned annual general meeting for that purpose:
Provided further that
financial statements adopted in the adjourned annual general meeting shall be
filed with the Registrar within thirty days of the date of such adjourned
annual general meeting with such fees or such additional fees as may be
prescribed within the time specified under section 40.
Thus, the Companies are required to
file their Financial Statements within 30 days from the Date or Due Date of
AGM.
SECTION 403
Section 403 deals with the fee
required to be paid by companies in case they fail to submit, file, register or
record any document with the Registrar of Companies.
THE COMPANIES (AMENDMENT)
ACT, 2017 that received the assent of the President on the 3rd January,
2018 amended Section 403 bringing about stringent penalties for non-filing
of Annual Return and Financial Statements. The provisos to Sub-section 1 of
Section 403 stands substituted by way of the amendment. After the Amendment
gets notified, Section 403 shall read as under:
(1) Any document, required to be
submitted, filed, registered or recorded, or any fact or information required
or authorized to be registered under this Act, shall be submitted, filed,
registered or recorded within the time specified in the relevant provision on
payment of such fee as may be prescribed:
“Provided that where any document,
fact or information required to be submitted, filed, registered or recorded, as
the case may be, under section 92 or 137 is not submitted, filed,
registered or recorded, as the case may be, within the period provided in those
sections, without prejudice to any other legal action or liability under this
Act, it may be submitted, filed, registered or recorded, as the case may be,
after expiry of the period so provided in those sections, on payment of such
additional fee as may be prescribed, which shall not be less than one
hundred rupees per day and different amounts may be prescribed for
different classes of companies:
Provided further that where the
document, fact or information, as the case may be, in cases other than referred
to in the first proviso, is not submitted, filed, registered or recorded, as
the case may be, within the period provided in the relevant section, it may,
without prejudice to any other legal action or liability under this Act, be
submitted, filed, registered or recorded as the case may be, on payment of such
additional fee as may be prescribed and different fees may be prescribed for
different classes of companies:
Provided also that where there
is default on two or more occasions in submitting, filing, registering
or recording of the document, fact or information, it may, without prejudice to
any other legal action or liability under this Act, be submitted, filed,
registered or recorded, as the case may be, on payment of a higher
additional fee, as may be prescribed and which shall not be lesser than twice
the additional fee provided under the first or the second proviso as
applicable.”
“(2) Where a company fails or
commits any default to submit, file, register or record any document, fact or
information under sub-section (1) before the expiry of the period specified in
the relevant section, the company and the officers of the company who are in
default, shall, without prejudice to the liability for the payment of fee and additional
fee, be liable for the penalty or punishment provided under this Act for such
failure or default.”.
A brief analysis of the above
sections provides that in case the amendment gets effective, the companies
shall have to pay an additional fees of Rs. 100 per day starting from the day
succeeding the Due Date of Filing of Form AOC-4 (pursuant to Section 137, i.e.,
Financial Statements) & Form MGT-7 (pursuant to Section 92, i.e., Annual
Return). In case such default continues for two or more financial years, the
additional fees shall become Rs. 200 per day starting from the day succeeding
the Due Date of Filing of Form AOC-4 (pursuant to Section 137, i.e., Financial
Statements) & Form MGT-7 (pursuant to Section 92, i.e., Annual Return). In
addition to the fees, the company and officers in default shall be liable for
penalty or punishment.
For Example,
ABC Limited is a Company. The Due
Date for Filing the Accounts and Return of ABC Limited for the FY 2017-18
according to Companies Act, 2013 shall be as follows:
AOC-4 30/10/2018
MGT-7 29/11/2018
In case the amendment to the
Section 403 gets notified and the company fails to file the forms within the
date specified herein above, it shall pay a penalty of Rs 100 from 01/11/2018
till the date of filing of Form AOC-4 and from 30/11/2018 till the date of
filing of Form MGT-7.
CONCLUSION
Hence, before the above stated
provision gets its effective date, all the companies who have defaulted in
filing of their Financial Statements and Annual Returns for any number of years
are advised to take immediate steps for making their default good and file all
the pending Financial Statement pursuant to Section 137 and Annual Return
pursuant to 92 to avoid the ill consequence of applicability of amendment to
Section 403 and avoid the payment of increased additional fees.
see more info at: https://taxguru.in/company-law/impact-amendment-section-403-companies-act-2013.html
