Penalty for Late Filing of Annual Return of Company

Preface: This post was originally published in 2022 and has been updated on March 12, 2025, to provide you with the most current and accurate information.

Once a company is incorporated, its directors are responsible for ensuring that various regulatory and statutory filings are submitted on time. Failure to do so could result in penalties and the disqualification of directors from incorporating another company in the future. In this blog post, we will explore the penalty for late filing of an annual return of a company.

Who Must File Annual Return?

The following companies, incorporated under the Companies Act, 2013, must file an annual return using either Form MGT-7 or MGT-7A (depending on the company type) at the end of each financial year.

• Private Limited Company

• One Person Company

• Limited Company

• Section 8 Company

• Producer Company

• Nidhi Company

Further, even the companies which no longer exist need to file annual returns till the name of the company is struck off from the Register of Companies by the Registrar. 

Moreover, nonfunctioning companies or companies with no activity are also required to file the annual return at the end of each financial year. Thus, the fact that a company has not been functioning does not exempt the company from its requirement for filing of the annual return.

Penalty for Late or Non-Filing of Annual Return under Companies Act 2013

The Companies Act 2013 outlines provisions for failure to file annual returns. According to Section 92 of the Companies Act 2013, sub-section 4, “Every company shall file with the Registry a copy of the Annual Return, with sixty days from the date on which the Annual General Meeting is held or where an 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.” 

According to sub-section 5 of Section 92 of the Companies Act, 2013 (as amended and effective from 21.12.2020), “If a company fails to file its annual return under sub-section (4) before the expiry of the period specified therein, such company and its every officer who is in default shall be liable to a penalty of ten thousand rupees. In case of continuing failure, a further penalty of one hundred rupees shall be imposed for each day after the first during which such failure continues, subject to a maximum of two lakh rupees in the case of a company and fifty thousand rupees in the case of an officer who is in default.” 

In addition to this, according to Section 92(6) of the Companies Act, 2013, “if a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made thereunder, he shall be liable to a penalty of two lakh rupees.” 

Disqualification of Directors under Section 164(2)

To hold directors accountable for properly filing the company's annual returns, there is a provision for the disqualification of directors under Section 164(2) of the Companies Act 2013. According to this section, any director of the company will be disqualified if the annual return is not filed for three consecutive financial years.

Further, he would not be eligible for appointment as a Director of any other company for a period of five years from the date on which the defaulting company failed to file annual returns.

Penalty for Late Filing of Annual Return under GST

GST annual return is filed using Form GSTR-9, which contains sales, purchases and GST charged and paid on the same in a financial year. All the GST-registered businesses must file GST annual return in GSTR 9 if their annual turnover crosses Rs. 2 crores. 

If a company fails to file the GST annual return in a timely manner, it will be subject to penalties under GST regulations. The table below outlines fee for late filing of annual return under GST based on annual turnover:

Note: A benefit of exemption applies to the Integrated GST (IGST), as it is not subject to late fees if the return submission is delayed.

Conclusion

Filing annual returns with the RoC and GST Department is crucial to ensure compliance with legal and regulatory requirements. Every company registered under the Companies Act, 2013, must file an annual return with the RoC within 60 days of the Annual General Meeting. A GST-registered business must mandatorily file the GST annual return if its annual turnover exceeds Rs. 2 crore. If you own or manage a business, ensure you file your company’s annual returns on time to avoid late penalties. For assistance in filing annual returns easily, connect with Registrationwala’s experts!

Frequently Asked Questions (FAQs)

Q1. Who is held accountable if the company fails to file annual returns?

A. The directors are responsible for ensuring that the company files annual returns. Thus, if a company fails to file annual returns, the directors are held accountable. Additionally, the officers in default are also held accountable.

Q2. Which form do we need to file a company’s annual return under Companies Act 2013?

A. According to the Companies Act 2013, you must file the annual return in Form MGT-7. This form should include details such as the registered office and principal business activities, directors and key managerial personnel, shareholding structure, debentures and other securities, and any penalties or legal matters.

Q3. How many years of non-filing of annual return lead to director’s disqualification?

A. A company’s directors are disqualified if annual returns are not filed for three consecutive financial years.

Q4. Can a disqualified director continue managing the company?

A. No, a disqualified director cannot continue to manage the company.

Q5. Which companies must file an Annual Return with the ROC within 60 days of the AGM?

A. All companies, irrespective of the type or the scale of their business, must file an Annual Return with the ROC within 60 days of the AGM.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.