Company Law Update: Annual Compliances for Small Companies

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As per Companies Act, 2013 Compliance requirements for Companies have been changed as compared to Companies Act, 1956. Even though Companies Act came into force from 1stApril 2014 but annual Compliances for Financial year 2013-14 were as per Companies Act, 1956. But from the financial year 2014-15 Annual Compliances will be as per Companies Act, 2013. New Annual Forms will be prepared with new Requirements. Annual Compliances have completely changed from the earlier Compliances. Major Changes are as follows:
1. Directors’ Report: There are many new clauses, which Companies have to add in Directors’ Report. Like: Disclosure of Sexual Harassment Act, Dates of Board Meetings held during the Financial Year, No. Of Board Meetings attended by the Directors etc.
2. Annual Return (MGT-7): Earlier Annual Return was required to be prepared in e-form 20B.Now new form for Annual Return is MGT-7. This is a very lengthy form as compared to earlier Annual Return under Schedule- V. There are two provisions relating to annual return one is ‘CERTIFICATION’; other one is ‘SIGNING’.
CERTIFICATION of Annual Return by a Company Secretary in practice:
a) All Listed Companies
b) Every Company having;
o    Paid-Up share capital of 10 Crore (Ten Crore) rupees or more, or;
o    Turnover of 50 Crore (fifty crore) rupees or more
SIGNING of Annual Return by a Company Secretary in practice:
a) All Listed Companies
b) Every Public Company;
c) Private Limited Company having:
o    Paid up share capital exceeding 50 Lac, or;
o    Turnover exceeding 2 crore.
3. Financial Statement: Earlier in Companies Act 1956, Companies were required to prepared (Balance Sheet and Statement of Profit & Loss Account) as a part of Annual Report. But now in Companies Act, 2013 there is a requirement to prepare the following as a part of Financial Statements:
1.      Balance Sheet and Statement of Profit & Loss Account
2.      Cash Flow Statement (Except Small Companies and OPC)
3.      Consolidated Financial Statement.
4.      Secretarial Standards:  From 1stJuly 2015 onwards, every meeting will be conducted in consolidation of provisions of Secretarial Standards and Companies Act, 2013. It needs a lot of Concentration.
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With  Warm Regards

 

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