Section 137 of Companies Act 2013: What You Need to Know

We’re here to explain Section 137 of the Companies Act 2013. It deals with the rules for filing financial statements. All companies must file these statements with the registrar of companies. This includes the format and penalties for not following the rules.

Financial statements are key. They must include a balance sheet, profit and loss account, cash flow statement, and equity statement. This shows why companies must follow the filing rules carefully.

We aim to help you understand how to file financial statements. Knowing the rules and the consequences of not following them is important. The Act requires financial statements to follow certain accounting standards. Any deviations must be explained and their effects noted.

We’ll explore Section 137 in more detail. We’ll cover the filing requirements, format, and penalties for not following the rules. This will help you understand the Companies Act 2013 better. Knowing the rules for filing financial statements is key to avoiding penalties and staying compliant.

Key Takeaways

• Section 137 of the Companies Act 2013 mandates the filing of financial statements with the registrar of companies by all companies.
• Financial statements must include a balance sheet, a profit and loss account, a cash flow statement, and a statement of change in equity, as per the Companies Act 2013.
• The Companies Act 2013 requires financial statements to conform to accounting standards notified under Section 133.
• Companies must file their financial statements within thirty days of the annual general meeting, as specified in the Companies Act 2013 and its filing requirements.
• Penalties for non-compliance can include fines and imprisonment, as outlined in the Companies Act 2013, which highlights the importance of following the filing requirements for financial statements.
• The Companies Act 2013 requires companies to attach the consolidated financial statement, if any, when filing with the Registrar, which is a critical part of the filing requirements for financial statements.
• Understanding the filing requirements for financial statements is essential for companies to avoid penalties and ensure compliance with the Companies Act 2013.

Understanding Section 137 of Companies Act 2013

Companies must follow the rules set by the Companies Act 2013. They need to file their annual return. This rule applies to all companies registered under the Act and previous laws.

Every year, companies must send their financial statements to the registrar. This is a must, as stated in Section 137 of the Companies Act, 2013.

Section 137 has important rules. Companies must file their audited financial statements in Form AOC-4 within 30 days after the AGM. Companies listed on Indian stock exchanges and their Indian subsidiaries must use XBRL for their financial statements.

Companies with a paid-up capital of ₹5 crore or more, or a turnover of ₹100 crore or more, must follow these rules. They also need to if they prepare their financial statements under the Companies (Indian Accounting Standards) Rules, 2015.

The rules for filing financial statements are strict. Companies must follow these rules to avoid penalties. Non-compliance can lead to serious consequences, like fines and even jail time.

It’s vital for companies to know the rules of Section 137. They must ensure they meet the regulatory requirements to avoid any problems.

Financial Statement Filing Requirements

Companies must follow specific rules when filing financial statements. These include a balance sheet, profit and loss account, and a cash flow statement. They also need a statement of changes in equity and any explanatory notes. We’ll show you how to prepare and file these statements, including the documents needed and the filing process.

The format of financial statements changes based on the company type. For example, companies listed on Indian Stock Exchanges or with large turnovers must use e-form AOC-4 XBRL. But, some companies like banks and insurance firms are exempt from XBRL filing.

Mandatory Documents for Submission

Here are the documents you must submit:

• Balance sheet
• Profit and loss account
• Cash flow statement
• Statement of changes in equity
• Explanatory notes

Financial statements must follow the accounting standards of Section 133 of the Companies Act, 2013. If there are any deviations, they must be explained and their financial impact noted. The statements should also match the format in Schedule III for different company types.

Format and Preparation Guidelines

Financial statements must be presented at the Annual General Meeting (AGM) as per Section 129(2). The Board of Directors must approve the statement. It needs to be signed by at least one chairperson or two directors, including the managing director and CEO if there is one.

The deadline for filing is 30 days after the AGM. Failure to file on time can result in a penalty of up to ₹10 lakh.

Compliance Deadlines and Timelines

Understanding compliance deadlines and timelines is key. We must follow filing timelines to avoid penalties. The Companies Act, 2013, requires all Indian companies to follow these rules.

Important deadlines include KYC of Directors by 30th September each year. Also, Form DPT-3 for Return of Deposit is due by 30th June annually. Lastly, CSR reporting (Form CSR-2) must be done by 31st May after Form AOC-4.

To stay on track, we need to know these rules:

• Annual Filing (Form AOC-4) is due within 30 days after the AGM.
• The Annual Return (Form MGT-7) must be filed within 60 days of the AGM.
• Compliance certificate (MGT-8) is needed for listed companies or those with over ₹10 crore in share capital or ₹50 crore in turnover.

Meeting these deadlines helps us avoid penalties. It’s vital to keep up with regulatory requirements and filing timelines. This ensures our companies run smoothly and stay legal.

Penalties and Legal Consequences

It’s important to know the penalties for not following Section 137 of the Companies Act 2013. The law has strict rules for not filing financial statements. This can lead to serious legal issues.

The fine for not filing financial statements is Rs. 10,000. If the company keeps failing, it pays Rs. 100 extra each day.

The highest penalty for a company is Rs. 2,00,000. Officers who fail face a fine of Rs. 10,000, up to Rs. 50,000 at most. A case against M/s Nulinz Education Private Limited shows the severity of these penalties.

Monetary Penalties for Non-compliance

Not following Section 137 can cost a lot of money. Here are some penalties:

• Penalty for failing to file financial statements: Rs. 10,000
• Additional penalty for continuing failure: Rs. 100 per day
• Maximum penalty for a company: Rs. 2,00,000
• Maximum penalty for officers in default: Rs. 50,000

Remedial Measures

To avoid fines and legal trouble, companies must follow Section 137. They need to file financial statements on time and pay any fines. By doing this, companies can avoid big penalties.

Conclusion

Understanding and following Section 137 of the Companies Act 2013 is key for businesses in India. By filing their financial statements on time, companies can avoid fines. This also builds trust with investors and lenders.

Following the financial reporting rules from the Ministry of Corporate Affairs (MCA) is vital. It shows a company’s dedication to being open and responsible. Keeping accurate financial records and following the right formats helps avoid issues with the Registrar of Companies (RoC).

Ignoring these rules can lead to big problems. Companies might face fines, legal trouble, or even be kicked off stock exchanges. It’s important for businesses to focus on following the rules to keep their stakeholders’ trust and thrive in the long run.