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Compliance of ROC Work

1. Filing of MSME Return

2. Filing of DPT-3

3. Director KYC

4. ADT-1

5. AOC-4

6. MGT-7…etc various things

Filing of MSME Return

The Ministry of Corporate Affairs (MCA) issued a notification that specific companies having outstanding dues to the MSME (Micro, Small and Medium) enterprises have to file the particulars of all current outstanding dues in Form MSME with the ROC (Registrar of Companies).

Companies need to identify if their suppliers are registered or not under the MSME Act, 2006. When the suppliers are registered under the MSME Act, and there are outstanding dues by a company to the MSME suppliers, it must file Form MSME.

Who Should File Form MSME : –

Specified companies should file Form MSME when payments are due to MSME for more than 45 days from the date of acceptance of the services or goods, along with the reason for its delay. Specified companies are following:

1. That have obtained goods or services from the MSME.
2. Whose payments to the MSMEs exceed 45 days from the date of acceptance or deemed acceptance of the goods or services.

Purpose of Filing Form MSME-1 : –

The MSME Development Act, 2006 (MSMED) strengthens the provisions relating to delayed payments to the MSMEs by providing the maximum credit period and penal interest for delay in payment. When there is a delay in payment by the companies, they must mention the reason for such delay in their statement of accounts.

Section 15 of the MSMED Act states that where the suppliers render services or supply goods to any buyer, the buyers should make payment on or before the agreed date between them and the suppliers. When there is no agreed date for payment between the MSME supplier and buyer, the buyer must make payment before the appointed date. The appointed date means fifteen days from the date of acceptance.

Section 15 also states that the period of credit granted by the seller should not exceed 45 days from the acceptance date or date of deemed acceptance. To strengthen this provision further, the MCA introduced Form MSME. Every company that has obtained services or goods from an MSME supplier and has outstanding payment for more than 45 days must disclose it to the ROC by filing the MSME return.

The MSME is a half-yearly return that the specified companies need to file regarding their outstanding payments to the MSME. In this manner, the ROC can keep track of the companies that have outstanding dues towards MSMEs and the MSME suppliers who need to receive payments.

However, companies have to file this return only when they have payments outstanding for more than 45 days to the MSME supplier. The companies need not file a ‘Nil MSME Return’ when there are no outstanding amounts with the MSME suppliers.

Filing of DPT-3

DPT 3 is a return of deposits that companies must file to furnish information about deposits and/or outstanding receipt of loan or money other than deposits.

Latest updates on Form DPT-3 : –

Form DPT-3 has been included in the list of forms under the Companies Fresh Start Scheme (CFSS) 2020, Accordingly no late fees will be charged if the form is filled till 30th of September 2020.

Background : –

In order to safeguard the interest of creditors or depositors, the Central Government in consultation with the Reserve Bank of India notified the amendment in the Companies (Acceptance of Deposits) Rules 2014 through Companies (Acceptance of Deposits) Amendment Rules 2019.

Introduction : –

MCA vide its notification dated 22nd January 2019 notified that every company other than a government company must file a one-time return in DPT 3. It is also required to be filed annually. Accordingly, a sub-rule (3) was inserted after sub-rule (2) in Rule 16A of the Companies (Acceptance of Deposits) Rules, 2014 which reads as follows:

Every company other than Government company shall file a onetime return of outstanding receipt of money or loan by a company but not considered as deposits, in terms of clause (c) of sub-rule 1 of rule 2 from the 01st April, 2014 to 31st March, 2019, as specified in Form DPT-3 within “ninety days from 31st March, 2019” along with a fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.

The said time period was then amended by issue of General Circular No.05/2019 which stated that the additional fee will be levied after 30 days from the deployment of the form DPT -3 on MCA 21 portal. Therefore, the revised due date was 31st of May 2019. Since then, the form must be filed annually.

Who is exempt from filing the return : –

Every company except a government company must file this return. Additionally, as per Rule 1(3) of the Companies (Acceptance of Deposits) Rules 2014, the following companies are also exempt:

Banking company
Non-Banking Financial Company
A housing finance company registered with National Housing Bank
Any other company as notified under proviso to subsection (1) to section 73 of the Act.

Director KYC

Director identification number (DIN) is a unique identification number given to a person wanting to be a director or an existing director of a company. In this digitised era, application in e-form DIR-3 was sufficient to obtain DIN. This was a one-time process for any person who wants to be a director in one or more companies. However, now with the move of the Ministry of Corporate Affairs (MCA) to update its registry, all directors with a DIN will have to submit their KYC details annually in e-form DIR-3 KYC

Who has to file e-Form DIR-3 KYC : –

As per MCA recent announcement, any director who was allotted a DIN by or on 31st March 2018 and whose DIN is in approved status, will have to submit his KYC details to the MCA. Further, this procedure is mandatory for the disqualified directors too.

From the Financial Year 2019-20 onwards, it is mandatory for every director who has been allotted a DIN on or before the end of the financial year and whose DIN is in approved status, will have to file form DIR-3 KYC before 30th September of the immediately next financial year.

For example– For the Financial Year 2022-23, the directors having DIN or Director Partner Identification Number (DPIN) and the directors allotted with a DIN/DPIN by 31st March 2023, need to file the e-Form DIR-3 KYC before 30th September 2023.

Checkpoints for filing the e-Form DIR-3 KYC

Every Directors unique personal mobile number and email address will have to be provided while filing the e-Form. This number and email address will be verified by an OTP (one-time password).

The second check implanted here would be that the director has to use his own digital signature while filing this e-Form.

Further, the third test to ensure that complete and right information is provided will be that the e-Form should be certified by a practising Chartered Accountant or Company Secretary, or Cost and Management Accountant.

Consequence of not filing e-Form DIR-3 KYC within the specified Due Date : –

In case a director who is supposed to file the e-Form does not file it by 30th September on MCA 21 portal, the department will mark the DIN of such director as ‘Deactivated due to Non-filing of DIR-3 KYC’. If the director wishes to re-activate his DIN in future by filing the missed-out e-Form DIR-3 KYC, he can do so after paying a late fee of Rs 5,000. This fee would be payable on or after 30th September of the year in which the e-Form DIR-3 is to be filed. This form needs to be filed annually by the directors.

ADT-1

A company needs to inform the registrar of companies (ROC) about the appointment of its auditor after the conclusion of AGM (annual general meeting) in a defined manner. Form ADT-1 is to be used here.

Form ADT- 1 is used by a company to intimate the registrar of companies about the appointment of an auditor after the completion of its annual general meeting (AGM).

Sec 139 (1) of the new Companies Act 2013 mandates this and this form has to be filed every year after the AGM in which the auditor was appointed.

Details of Auditor to be submitted : –

Details like the category of auditor (firm or an individual practitioner), PAN number of the auditor, Chartered Accountancy membership number, Address, Email-id, the period for which appointment is made, date of appointment along with the date of AGM, membership number of vacated auditor, date and reason of casual vacancy if any etc.

When should you file Form ADT-1 : –

Form ADT-1 must be filed with the registrar of companies within 15 days from the date of appointment of the Auditor.

For example, if the company’s AGM was held on 30 September 2022, then Form ADT 1 has to be filed by 15 October 2022.

What are the documents to be filed along with Form ADT-1 : –

The list of documents to be attached along with Form ADT-1 are:

1. Written consent from the Auditor
2. Company’s Board resolution copy
3. A certificate from the Auditor that he/she not disqualified to be appointed as an Auditor

What are the documents to be filed along with Form ADT-1 : –

1. The responsibility to file Form ADT 1 is that of the company and not of the auditor
2. Form ADT 1 has to be filed even in case of appointment of the auditor for a casual vacancy.
3. Filing of Form ADT 1 is mandatory for all companies either listed/unlisted/public/ private/ others.
4. There is a general thought that Form ADT 1 is not required to be filed for the appointment of the first auditor. This is because rule 4 (2) of company rules, 2014 mentions only about Sec 139 (1)- appointment of auditors and not about Sec 139 (6) – appointment of the first auditor. However, it is a good practice to file Form ADT 1 for the appointment of the first auditor too.

AOC-4

The financial statements of a company must be filed with the Ministry of Corporate Affairs every year. The MCA form for filing financial statements is AOC-4. Hence, Form AOC-4 is submitted with the MCA for each Financial Year within 30 days of a company’s annual general meeting. Along with AOC-4 form, the documents such as Board’s report, Auditors’ report, Statement of subsidiaries in Form AOC-1, details of CSR policy etc. are filed. AOC-4 must be certified by a practising Chartered Accountant or Company Secretary. In this article, we look at the procedure for filing AOC-4 in detail.

Documents to Be Filed in AOC-4 : –

Financial Statements of a company includes Balance Sheet, Profit and Loss Account, Cash Flow statement (if applicable), statement of change in equity (if applicable) and any explanatory notes annexed to the financial statements. Financial statements along with Board Report must be filed for all companies registered in India (Private Limited Company, One Person Company, Limited Company, Section 8 Company, etc.,) to provide the Shareholders, Government, Stakeholders and the Public a broad financial picture of the affairs of the company during a financial year.

The following is the complete list of documents that must be filed with AOC-4 : –

1. Details of other entity(s)
2. Secretarial Audit Report
3. Optional attachment(s), if any.
4. Details of remaining CSR activities
5. Details of comments of CAG of India
6. Approval letter of extension of financial year or AGM
7. Supplementary or test audit report under section 143
8. Directors’ reports as per sub-section (3) of section 134
9. Company CSR policy as per sub-section (4) of section 135
10. Statement of the fact and reasons for not holding the AGM
11. Statement of subsidiaries as per section 129 – Form AOC-1
12. Statement of the fact and reasons for not adopting financial statements in the annual general meeting (AGM)
13. Copy of financial statements duly authenticated as per section 134 (including Board’s report, auditors’ report and other documents)
14. Details of salient features and justification for entering into contracts/Arrangements/transactions with related parties as per Sub-section (1) of section 188 – Form AOC-2

MGT-7…etc various things

A registered company needs to file an annual return every year with ROC. This return contains the basic information related to company, its shareholders, directors etc. as on the last day of the financial year i.e., 31st March. It is mandatory compliance for all registered companies to file the annual return in Form MGT-7.

MGT-7 is an electronic form provided by the Ministry of Corporate affairs to all the corporates in order to fill their annual return details. This e-form is maintained by the Registrar of Companies via electronic mode and on basis of the statement of correctness given by the company.

Who has to file the form : –

1. A company files the Form MGT-7 for its annual return
2. All companies, whether public or private which are registered in India must file the Form MGT-7 every year.
3. One person company (OPC) introduced in the Finance Act 2021 are also mandatorily required to file the annual return in Form MGT-7.

What are the consequences of non-filing the form : –

The penalty for not filing an annual return has been remarkably increased in 2018 to Rs. 100 (Rupees Hundred) per day of default. Hence, it should be ensured that the annual return in this form is filed before the due date.

What is the purpose of the e-Form MGT-7 : –

Every company shall prepare an annual return in the form MGT-7 containing the particulars as they stood on the close of the financial year. These details include details regarding:

1. Indebtedness of the company;
2. Its Shareholding pattern; and
3. Such other matters as required in the form.
4. Remuneration of directors and key managerial personnel;
5. The shares, debentures, other securities and shareholding pattern of the company;
6. Meetings of members or a class thereof, Board and its various committees along with attendance details;
7. The matters relating to certification of compliances and disclosures as may be prescribed;
8. The members and debenture-holders along with alterations connected to them since the end of the previous financial year;
9. The registered office, principal business activities, particulars of its holding, subsidiary and associate companies;
10. The promoters, directors, key managerial personnel along with alterations connected to them since the close of the previous financial year;
11. Penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or punishment;