Companies Act Section 92

Companies Act, Section 92: Annual Return
Section 92 of the Companies Act addresses the key provisions regarding the annual return of companies, covering its preparation, certification, filing, and penalties for non-compliance. The section ensures that companies provide transparency regarding their structure, management, financial dealings, and regulatory compliance. Below is a detailed breakdown of Section 92 and its various subsections:

Subsection (1): Preparation of Annual Return

Requirement to Prepare Annual Return:

Each company, irrespective of its size or structure, is required to prepare an annual return at the close of each financial year. The return must be in the prescribed format and must include information as of the end of the financial year.

Information to Be Included in the Annual Return:

The annual return must provide the following detailed information:

1. Registered Office and Business Activities:

The address of the company’s registered office.

A description of the principal business activities carried out by the company.

Information regarding the company’s holding, subsidiary, and associate companies.

2. Shares, Debentures, and Shareholding Pattern:

Detailed information about the company’s shares, debentures, and other securities.

A comprehensive description of the shareholding pattern, including details of the shareholders and the proportion of shares held by each.

3. Members and Debenture Holders:

The names and details of the company’s members (shareholders) and debenture holders.

Any changes to the members or debenture holders since the end of the previous financial year.

4. Promoters, Directors, and Key Managerial Personnel (KMP):

Information about the promoters, directors, and key managerial personnel (KMP) of the company.

Any changes in these positions, including appointments, resignations, or removals during the financial year.

5. Meetings and Attendance:

Information regarding the meetings held by the members (or any class of members).

Information on meetings of the Board of Directors and any committees of the Board, including the attendance of directors at such meetings.

6. Remuneration:

Details of the remuneration paid to the directors and key managerial personnel during the year.

7. Penalties, Punishments, and Offences:

Information regarding any penalties or punishments imposed on the company, its directors, or officers.

Details about the compounding of offences, if applicable, and any appeals filed against penalties or punishments.

8. Compliance and Disclosures:

Confirmation of the company’s compliance with the relevant provisions of the Companies Act and other applicable laws.

Any other disclosures required by the Act or the applicable rules.

9. Foreign Institutional Investors (FIIs):

Information about the shares held by or on behalf of Foreign Institutional Investors (FIIs), in accordance with the prescribed rules.

10. Other Prescribed Matters:

Any additional information that may be required by the Companies Act or other relevant regulations.

Signing of the Annual Return:

The annual return must be signed by at least one director and the company secretary.

If there is no company secretary, the return must be signed by a practicing company secretary.

For One Person Companies (OPCs) or small companies, the return may be signed by either the company secretary (if appointed) or the director of the company.

The Central Government has the discretion to prescribe an abridged form of the annual return for certain categories of companies, such as OPCs and small companies.

Subsection (2): Certification of Annual Return

Applicability of Certification:

The annual return of listed companies, or companies meeting specified criteria related to paid-up capital or turnover, must be certified by a company secretary in practice.

Certification Requirements:

The company secretary’s certificate must confirm that:

The annual return accurately and comprehensively reflects all the necessary details.

The company has complied with all provisions of the Companies Act applicable to its activities.

Subsection (3): Extract of Annual Return in Board’s Report

A summary or extract of the annual return must be included in the company’s Board’s report, which is presented at the company’s Annual General Meeting (AGM). The format of the extract must follow the prescribed rules.

Subsection (4): Filing of Annual Return with the Registrar

Timeline for Filing:

The company is required to file its annual return with the Registrar of Companies (RoC) within 60 days:

From the date of the AGM, or

If no AGM is held, within 60 days from the date the AGM should have been held.

Reasons for Non-Holding of AGM:

If the AGM is not held, the company must file a statement with the RoC explaining why the meeting was not convened.

Fees for Filing:

The annual return filing must be accompanied by the prescribed filing fees, which may include additional fees in case of late submission.

Subsection (5): Penalty for Failure to File Annual Return

Liability for Non-Compliance:

If a company fails to file its annual return within the prescribed period, both the company and its officers in default will be subject to penalties.

Penalties Imposed:

A one-time penalty of ?10,000 for failure to file on time.

For continued default, a penalty of ?100 for each day of delay beyond the first day of default.

The maximum penalty is:

?2,00,000 for the company.

?50,000 for each officer in default.

Subsection (6): Penalty for Incorrect Certification by a Company Secretary in Practice

If a company secretary in practice certifies the annual return in a manner that does not conform to the requirements set out in the Companies Act and the applicable rules, the company secretary will be liable to a penalty of ?2,00,000.

Purpose of Section 92

Transparency and Accountability:

The section ensures that companies are transparent about their structure, management, and financial dealings. By mandating detailed disclosures, it fosters accountability and clarity, which is critical for stakeholders to make informed decisions.

Protection of Stakeholder Interests:

The detailed disclosures in the annual return serve the interests of various stakeholders, including shareholders, creditors, and regulatory authorities, who rely on accurate and up-to-date information about the company’s operations.

Regulatory Compliance:

The requirement for certification and timely filing reinforces the company’s obligation to comply with the legal and regulatory framework established by the Companies Act, ensuring that corporate governance standards are upheld.