Filing annual ROC returns is a vital compliance requirement for businesses in India, ensuring transparency and legal standing. However, common mistakes can lead to penalties, legal issues, or even company strikes. Timely Annual ROC compliance ensures that your business stays compliant with reducing the risk of penalties and legal complications. In this blog, Startup Portal Business Services highlights frequent errors and shares tips to help you avoid them.

Common Mistakes While Filing Annual Returns:

Missing the Deadline:

• Many businesses fail to submit their annual returns on time, leading to late fees and penalties. Delayed filing can also affect your company’s compliance status with the Ministry of Corporate Affairs (MCA).
• Tip to Avoid: Mark the due dates on your calendar and set reminders well in advance. Engaging professional services like our team at Startup Portal Business Services can help ensure timely compliance.

Incorrect or Incomplete Information:

• Filing incorrect details, such as wrong director names, mismatched financial figures, or missing disclosures, can result in rejection or legal consequences.
• Tip to Avoid: Double-check all details before submission. Ensure accuracy in company details, financial statements, and director information to avoid rejection or penalties.

Not Updating Business Information:

• Changes in company details, such as a new registered address, directors, or shareholders, must be updated before filing the annual returns. Failure to update these changes can lead to discrepancies in records.
• Tip to Avoid: If your company’s registered address, directors, or shareholding pattern changes, update these details before filing. Keep records of resolutions and approvals for any changes made.

Forgetting to Include Financial Statements:

• Annual ROC returns must include financial statements such as the balance sheet and profit & loss statement. Omitting these documents can lead to non-compliance.
• Tip to Avoid: Ensure that these documents are audited and properly attached before submission.

Failure to File for Non-Active or Dormant Companies:

• Even if a company is non-operational, it must still file annual returns. Many businesses overlook this requirement, which can result in the company being classified as a defunct entity.
• Tip to Avoid: Even if your company is inactive, annual returns must be filed. You can file for dormant status if there is no business activity to reduce compliance burdens.

Filing for the Wrong Tax Year:

• Submitting returns for an incorrect financial year can cause confusion and compliance issues with the authorities.
• Tip to Avoid: Ensure that your filing corresponds to the correct financial year. Refer to previous filings and confirm the period covered to avoid discrepancies.

Failure to Pay Outstanding Taxes or Fees:

• Unpaid ROC fees, penalties, or government dues can delay the filing process or lead to penalties.
• Tip to Avoid: Clear all pending ROC fees, penalties, and taxes before filing to prevent complications. Keep track of payment receipts for reference.

Neglecting to Sign or Authorize the Return:

• A return that is unsigned or unauthenticated is the same as not filing it. According to the Companies Act 2013, the Annual Return needs to be signed by either the Director, Company Secretary, or a practicing Company Secretary. Moreover, it is important to attach the company’s seal after the return. Not signing and stamping the Annual Return correctly might result in its rejection.
• Tip to Avoid: Ensure that the annual return is signed by the authorized director and certified by a Company Secretary (if applicable) before submission.

Not Keeping Proper Records for Future Audits:

• Many companies fail to maintain proper documentation, which can cause issues during audits or compliance checks.
• Tip to Avoid: Maintain proper documentation of all filings, approvals, and acknowledgments for future audits. This will help in case of compliance checks or inspections.

Ignoring Professional Assistance:

• Filing ROC returns can be complex, and errors can lead to penalties. Many businesses attempt to file independently without professional guidance, leading to mistakes.
• Tip to Avoid: Seeking guidance from professional consultants like our team at Startup Portal Business Services can save you from unnecessary trouble.

Annual Return Filing Checklist:

• Verify company details (name, address, directors, shareholders, etc.)
• Ensure financial statements are audited and attached
• Confirm the correct financial year is covered
• Pay outstanding fees and penalties
• Update business information, if applicable
• Sign and authorize the return before submission
• Keep records of filings for future reference

Conclusion:

Steering clear of these frequent errors when submitting annual ROC returns can protect your business from penalties, compliance problems, and legal difficulties. Effective planning, precision, and expert support can aid in achieving a seamless filing experience. Our skilled team at Startup Portal Business Services is available to help you with smooth ROC filing, LLP compliance Annual Return Filing in Pune, and other business compliance requirements. Contact us today to simplify your yearly return submissions!