We all are much aware about company registration and process of registration as this is the first step to reach our financial goal. But what about post registration compliance?
Again, we are much aware that a registered company should conduct an audit of financial records, that too every fiscal year and file Income Tax Return. But is that all?
NO!! If you think, receiving ‘Tax Clearance Certificate’ is all you need, THIS POST IS FOR YOU.
You have a company registered under Company’s Act 2063. There are multiple post compliance requirements mentioned in the Act, but today we will discuss about ‘Annual Return Filing’/ ‘बार्षिक अध्यावधिक’.
A. Concept of Return Filing?
For all companies registered under Company’s Act 2063, Office of Company Registrar (OCR) is the regulatory authority to ensure compliance of provisions mentioned in Act. There are multiple provisions such as conduct of General Meetings, independent audit of financial records, share capital requirements, liquidation of company and many more. These provisions are made to protect the interest of public, shareholders and company itself.
So how do you think OCR reviews thousands of companies, registered across the country? Companies are required to submit documents and information to demonstrate their compliance with the Act. The deadline for submitting these documents may vary as stated in the Act.
Return Filing is one of the compliance requirements which ensures that a company has fulfilled the following obligations:
- Annual Audit of Financial Report
- Conduct of Annual General Meeting
- Appointment of Auditor
B. Applicable to Whom?
Every company registered with Office of Company Registrar (OCR), whether it is Private Limited Company, Public Limited Company, or Non-Profit Organization, should file Annual Return with OCR. Yes, even if there is no business transaction for any fiscal year, company needs to file annual return.
C. Time Frame of Applicability?
This compliance we are talking about is ‘Annual Return Filing’ for a reason. Company should file return for every fiscal year. There is no exemption for whatsoever reason.
Now, let’s talk about the deadline.
- A Public Limited Company should file annual return within 6 months after the end of the fiscal year that means by the end of Poush every year. For example, deadline would be end of Poush 2080 for FY 79-80.
- However, for the first year, the Act requires a public company to hold AGM within 1 year of its registration and same is the requirement for filing Annual Return. For example, if your company is registered in Shrawan 2079, don’t wait till Poush 80 to file your annual return. Deadline for 1st year of your company happens to be by Shrawan 2080 only.
- Similar rules are applicable to Private Limited Companies unless otherwise mentioned in it’s Article of Association.
D. Documents Required?
Documents required to be submitted is related to the purpose of Annual Return Filing as discussed in point A. A company should submit following documents to file Annual Return:
- Application to OCR specifying the documents submitted
- Minute of Board of Directors Meeting for conduct of AGM
- Minute of Annual General Meeting
- Audit Report
- Appointment of Auditor
- Sec 51 – Inventory of shares, debentures and loans
E. Fine for Non-Compliance
Legal Non – compliance usually results in fine and penalty so, non-compliance of annual return filing is no different. Fine applicable depends on capital of the company and delay time period.
Longer the delay period, higher will be the fine payable.
Following chart will help you understand the fine applicable
1. Private Limited Company / Public Limited Company
S.N | Particulars | Applicable Fine For Paid Up Capital | ||
Up to 25,00,000 | Up to 1,00,00,000 | Above 1,00,00,000 | ||
1 | Up to 3 months of expiry of time limit | NRs. 1,000 | NRs. 2,000 | NRs. 5,000 |
2 | Up to 6 months of expiry of time limit | NRs. 1,500 | NRs. 3,000 | NRs. 7,000 |
3 | Upto 1 year of expiry of time limit | NRs. 2,500 | NRs. 5,000 | NRs. 10,000 |
4 | After expiry of 1 year of time limit, fine for each year | NRs. 5,000 | NRs. 10,000 | NRs. 20,000 |
2. Non-Profit Organization
S.N | Particulars | Applicable Fine For Paid Up Capital |
1 | Up to 3 months of expiry of time limit | NRs. 2,000 |
2 | Up to 6 months of expiry of time limit | NRs. 3,000 |
3 | Up to 1 year of expiry of time limit | NRs. 5,000 |
4 | After expiry of 1 year of time limit, fine for each year | NRs. 10,000 |
F. How to file return?
Arranging the documents is indeed the first step in filing annual return but not knowing ‘What to do Next’ may ultimately lead you in paying fine for non-compliance of return filing. And importantly, company’s director shall be held responsible for such non-compliance.
i. Return shall be filed online via official website of Office of Company Registrar. Company already registered with OCR should have login details to enter the online portal to submit documents online.
ii. After you login, you will find your option to upload documents for Post Registration Compliance and you should upload your respective documents in respective sections.
iii. Submit the application once all documents have been uploaded to the portal. System generates an Application No. for your submission.
iv. Submitted documents will be verified by Registrar Officer in OCR, who will notify if any document is invalid, needs to be revised or has not been uploaded. Once the documents are verified, Registrar Officer shall calculate the fine applicable, if any.
v. Fine calculated shall be shown in the portal, which can be paid online or be deposited in specified bank.
vi. When all of the above steps are completed, OCR shall issue a letter confirming the completion of annual return filing for respective fiscal year.
Now you know, how important it is to file Annual Return, don’t miss to file next time when it’s due. Also, you can save your company from further more fines, by filing return for previous default years.
Legal compliance may not be as easy as you think. We may be able to help you if you are really worried about all these business compliance requirements. Simply, connect with us and know more about your business requirements and services we can offer to make your business a compliant entity.
