What is the penalty for late filing of OPC annual returns?

If an OPC fails to file Form MGT-7A or Form AOC-4 on time, a penalty of ₹100 per day per form is imposed. Continuous non-compliance for two years may lead to the company being struck off by the MCA, and the director could be disqualified for five years if filings are not completed for three consecutive years.

Is an OPC required to appoint an auditor even if it has no significant turnover?

Yes, every OPC must appoint a Chartered Accountant (CA) as an auditor within 30 days of incorporation and conduct an annual statutory audit, regardless of its turnover. The auditor will review the financial statements and issue an audit report.

Does an OPC need to hold a Board Meeting for financial statement approval?

If an OPC has only one director, there is no requirement to hold a Board Meeting. However, the director must pass a resolution to approve the financial statements before filing them with the MCA.

What are the benefits of timely OPC annual compliance?

Filing annual returns on time helps avoid penalties, maintains the company’s legal standing, improves business credibility, facilitates access to loans and investments, and supports future business growth and expansion.

Team Ebizfiling

2 years ago

Penalties for Non-Filing of AOC-4 and MGT-7 & Due Dates

AOC-4 and MGT-7: Penalties for Non-Filing, Due Dates, Consequences

Introduction

If you run a Private Limited Company or an LLP in India, filing annual compliance forms like AOC-4 and MGT-7 is a legal must. Missing these filings can lead to heavy penalties, late fees, and even legal trouble. In this blog, we’ll break down the non-filing penalties for AOC-4 and MGT-7, explain why timely filing matters, and help you stay compliant. Whether you’re a business owner or a compliance professional, this guide is for you.

What is Form AOC-4?

Form AOC-4 is an annual filing form that companies in India must submit to the Ministry of Corporate Affairs (MCA). It is used to file the financial statements of the company, such as the balance sheet, profit and loss account, cash flow statement, and other related documents for each financial year. Non-filing or late filing of AOC-4 can lead to penalties and additional fees, which we’ll cover further in the blog.

Applicability: Every Private Limited Company, One Person Company, and other registered companies (except LLPs) must file AOC-4.
Purpose: It helps the MCA track the company’s financial performance and ensures transparency.
Due Date: Usually within 30 days from the date of the Annual General Meeting (AGM).

What is Form MGT-7?

Form MGT-7 is an annual return form that companies registered in India must file with the Ministry of Corporate Affairs (MCA). It contains detailed information about the company’s shareholding structure, members, directors, and key changes that occurred during the financial year. Filing MGT-7 on time helps to maintain legal compliance and avoid late fees and penalties.

Applicability: All companies, except One Person Companies (OPCs), must file MGT-7.
Purpose: To give a yearly snapshot of the company’s governance and ownership details.
Due Date: You must file it within 60 days from the date of the Annual General Meeting (AGM).

What are Penalties for Non-filing AOC-4 and MGT-7?

Non-filing of Form AOC-4 and Form MGT-7 can lead to strict penalties as per the Companies Act, 2013. The penalties are imposed both on the company and its directors, and they increase the longer the delay continues. Continuous non-compliance can also lead to disqualification of directors and legal notices from the MCA.

For Form AOC-4

If a company fails to file Form AOC-4 within the due date, it attracts both late fees and penalties.
The late filing fee is ₹100 per day of delay, with no upper limit, which means the longer the delay, the higher the cost.
In case the form is not filed at all, the company can be penalized ₹1,000 per day up to a maximum of ₹10,00,000.
These penalties highlight the importance of timely filing to avoid unnecessary legal and financial consequences.

For Form MGT-7

Failure to file Form MGT-7 on time results in hefty late fees and penalties.
The late filing fee is ₹100 per day of delay, with no maximum cap, which can lead to a significant financial burden if ignored.
If you completely miss the form, the company may face a penalty of ₹50,000, plus an additional ₹100 for each day the default continues, up to a maximum of ₹5,00,000.
These strict penalties make it crucial for companies to ensure timely and accurate filing of their annual returns.

We provide Pvt Ltd annual filing, LLP annual return filing and OPC annual return filing services, ensuring timely compliance with ROC regulations.

What are the Due Dates for Filing Form AOC-4 and MGT-7?

Form	Purpose	Due Date	Applicable To
AOC-4	Filing financial statements	Within 30 days from the date of the AGM	All companies (except LLPs)
MGT-7	Filing annual return	Within 60 days from the date of the AGM	All companies (except OPCs)

Note: Companies whose financial year ends on 31st March must hold the AGM by 30th September, which sets the usual due dates as follows:

AOC-4: 30th October
MGT-7: 29th November

The MCA may grant extensions that could change these due dates, so it’s important to stay updated annually.

What are the Consequences of Non-Compliance for AOC-4 and MGT-7?

Non-compliance with AOC-4 and MGT-7 filings doesn’t just mean paying a penalty; it can affect the legal standing, financial stability, and operational flexibility of a company. Staying compliant ensures smooth functioning and keeps the company in good standing with all regulatory authorities.

1. Heavy Penalties and Late Fee

Non-filing attracts a daily late fee of ₹100 per form, per day, with no upper limit, which keeps increasing the longer the delay continues. Additionally, separate penalties are levied on the company and its directors if the forms are not filed at all.

2. Disqualification of Directors

If a company fails to file financial statements (AOC-4) or annual returns (MGT-7) for three consecutive financial years under Section 164(2) of the Companies Act, 2013, it may disqualify its directors from being reappointed in that company or appointed in any other company for the next five years.

3. Company Status Marked as “Defaulting”

The Ministry of Corporate Affairs (MCA) may mark the company’s status as “defaulting” on the MCA portal, which affects its reputation, credibility, and ability to raise funding or apply for government tenders or loans.

4. Legal Action by the Registrar of Companies (ROC)

In cases of continued non-compliance, the ROC may issue legal notices and initiate proceedings under the Companies Act. This could result in fines, prosecution, and even strike-off of the company from the register of active companies.

5. Loss of Government Benefits or Schemes

The government may bar companies that do not meet compliance from availing incentives, tax benefits, or schemes meant for startups, MSMEs, or other categories.

6. Impact on Corporate Transactions

Non-compliant companies may face restrictions while:

Raising funds from investors.
Opening or renewing bank accounts.
Entering into mergers, acquisitions, or joint ventures.
Applying for various statutory registrations or licenses.

Can the Penalty be Waived?

Under the current provisions of the Companies Act, 2013, authorities do not waive penalties and late filing fees for non-filing of Form AOC-4 and MGT-7 under normal circumstances. Outside such schemes, the system mandates the penalty and continues to accumulate it until the default is corrected. Therefore, it is advisable to file all forms on time to avoid financial and legal consequences.

What is the Importance of Timely Filing?

Timely filing of Form AOC-4 and Form MGT-7 is not just a regulatory formality it is a critical part of maintaining a company’s legal and financial health. Here’s why it is so important:

1. Legal Compliance

Filing these forms within the prescribed due dates ensures that the company complies with the Companies Act, 2013. It helps to avoid penalties, prosecutions, and disqualifications of directors, and also keeps the company legally secure.

2. Avoidance of Penalties

The daily late fees for non-filing can quickly add up and become a heavy burden. Timely filing helps the company avoid ₹100 per day per form in late filing fees, as well as statutory penalties on both the company and its directors.

3. Maintains Company’s Active Status

The Ministry of Corporate Affairs (MCA) tracks the annual filings of companies. Failure to file can result in the company being marked as “defaulting” or even struck off from the MCA records in severe cases. Timely filing helps the company maintain its active and compliant status.

4. Enhances Credibility and Reputation

Consistent compliance boosts a company’s credibility with banks, investors, and clients. It reflects good governance and builds trust with stakeholders, which is especially crucial during funding, partnership, or tender applications.

5. Helps in Future Corporate Transactions

Timely filed financials and returns are often required for:

Raising capital
Loan approvals
Due diligence during mergers or acquisitions
Participating in government or private sector tenders

Delays can cause unnecessary roadblocks in such processes.

6. Transparent Financial Reporting

AOC-4 and MGT-7 clearly report the company’s financial position and shareholder structure. This promotes transparency and keeps regulatory authorities and stakeholders informed.

7. Smooth Director Appointments and Changes

Only companies in good compliance standing can appoint or reappoint directors without legal hassle. Timely filings protect directors from disqualification under Section 164 of the Companies Act.

Conclusion

Filing Form AOC-4 and MGT-7 on time is not just a compliance task; it’s essential for maintaining your company’s legal standing and financial credibility. Non-filing can lead to penalties, disqualification of directors, and loss of business opportunities. By understanding the due dates, penalties, and consequences, you can take proactive steps to stay compliant and avoid unnecessary legal trouble. Make annual filing a priority to ensure smooth and stress-free operations.

FAQ

1. What is the purpose of filing Form AOC-4 and MGT-7?

Form AOC-4 is used to submit a company’s financial statements, while MGT-7 is for filing its annual return, including shareholding and governance details.

2. Where should Form AOC-4 and MGT-7 be filed?

Both forms must be filed online through the MCA portal using valid digital signatures.

3. Why is it important to file AOC-4 and MGT-7 on time?

Timely filing helps avoid penalties, maintains compliance, protects the company’s active status, and enhances its credibility among investors and regulators.

4. When are AOC-4 and MGT-7 due for filing?

Form AOC-4 must be filed within 30 days of the AGM, and MGT-7 within 60 days of the AGM. for most companies, the due dates fall in October and November.

5. How can a company avoid penalties for non-filing?

By keeping track of compliance deadlines, filing accurate details on time, and consulting professionals if needed, companies can avoid late fees and other penaltie

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Categories: Pvt Ltd Company Annual Filing

Tags: AOC 4MGT-7

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