Annual Compliance for an Unlisted Company in F.Y. 2020-2021: A Complete Guide

Annual Compliance for an Unlisted Company
Shivani Jain
| Updated: Jan 23, 2021 | Category: Compliance, News

In India, the companies that are not listed on the recognized stock exchanges are termed as Unlisted Companies. That means the shares of these companies are privately owned. Further, it shall be significant to state that the operations, funding, and management of these companies are regulated by the provision of the Companies Act 2013. In this blog, we will discuss in detail the Annual Compliance for an Unlisted Company in F.Y. 2020-2021.

Concept of Unlisted Company

The term “Unlisted Company” means a company that is not listed on the recognized stock exchange and is governed by the provisions of the Companies Act 2013. That means these companies do not have the occasion to issue their shares to the general public for raising funds. Therefore, the shares of these companies are traded privately.

Further, it shall be significant to state that unlike listed companies, an unlisted company is owned by the private owners. Also, the compliance and disclosure requirements for an unlisted public limited company are must flexible and less complicated than a listed company.

Key Annual Compliance for an Unlisted Company in F.Y. 2020-2021

The key annual compliance for an unlisted company registered in India are as follows:

Intimation concerning Disqualification by Director

According to section 164 (2) of the Companies Act 2013, together with the Rule 14 (1) of the Companies (Appointment and Qualification of Directors) Rule 2014, the directors of an unlisted company need to file MCA Form DIR 8 once in a financial year. Further, for the financial year 2020 to 2021, the due date for filing Form DIR 8 is 31.03.2021.

Disclosure of Interest by Directors

According to section 184 of the Companies Act 2013, together with the Rule 9 of the Companies (Meeting of Board and its Power) Rules 2014, it is mandatory for every director of the company to disclose his/her interest at least once in a financial year or whenever there is a change in the interest. Further, the said interest needs to be disclosed on the occasions as follows:

  1. At the first BM (Board Meeting) of every financial year;
  2. At the BM that is held just after the change in interest;

Filling of Half Yearly MSME Return by Directors

Based on the provisions of the Companies (Furnishing of Information regarding payment to Micro & Small Enterprise Suppliers) Orders 2019, the directors of SME (Small and Medium Enterprises) needs to file MSME Half Yearly on the due dates as follows:

  1. By 31st October (For the Period: April to September);
  2. By 30th April (For the Period: October to March

Filling Directors’ KYC by Directors

One of the most significant annual compliance for an Unlisted Company is to file Directors KYC with the MCA. According to section 153 of the Companies Act 2013, together with the Rule 12A of the Companies (Appointment and Qualification of Directors) Rules 2014, all the directors need to furnish E-form DIR 3 KYC with the MCA on or before the 30th September of the immediate next financial year. That means this form is filed on an annual basis.

Return concerning Deposits and Outstanding Loans

Another Annual Compliance for an Unlisted Company is the filing of return concerning deposits and outstanding loans. Based on the provisions of section 73 of the Companies Act 2013[1], together with the Rule 16 of the Companies (Acceptance of Deposits) Rules 2014, the directors of an unlisted company need to file E-form DPT 3 with the MCA on or before 30th June of every financial year, i.e., on an annual basis.

Declaration by SBO

The term SBO stands for Significant Beneficial Owner, who is an individual and is responsible for holding shares of the reporting company, either directly or indirectly through an HUF (Hindu Undivided Family), Body Corporate, Partnership, Trust, or a Pooled Investment Vehicle.

Further, as per section 90 of the Companies Act 2013, together with the Companies (Significant Beneficial Owners) Rules 2018, the directors of an Unlisted Company need to file BEN 1 in the following two occasions:

  1. At the time of the commencement of Companies (Significant Beneficial Owners) Rules 2018; and
  2. At the time of acquiring significant beneficial ownership

Moreover, the due date for filing is 30 days from obtaining significant beneficial ownership.

Filing of Return to ROC concerning Declaration by SBO

As per section 90 of the Companies Act 2013, together with the Companies (Significant Beneficial Owners) Rules 2018, the directors of an unlisted company need to file e-form BEN 2 after the receipt of Significant Beneficial Ownership. Further, the said form needs to be filed within 30 days, starting from the date of receipt of SBO Declaration in Form BEN 1.

Reconciliation of SCA Report

As per section 42 of the Companies Act 2013, together with Rule 9A the Companies(Prospectus & Allotment of Securities) Rules 2014, the directors of an unlisted public company require to file E-form PAS 6 on half yearly basis with the MCA (Ministry of Corporate Affairs). Further, such an e-form needs to be filed within 60 days from the end of the present financial year.

Filing of Financial Statements by Foreign Companies

Based on the provisions of section 381 of the Companies Act 2013, together with rules 4, 5, 6 of the Companies (Registration of Foreign Companies) Rules 2014, the directors of Foreign Companies needs to file E-form FC 3 for financial statements on an annual basis, within 6 months from the end of the financial year.

Filing of Financial Returns by Foreign Companies

Based on the provisions of section 384 (2) of the Companies Act 2013, together with rules 7 of the Companies (Registration of Foreign Companies) Rules 2014, the directors of Foreign Companies needs to file E-form FC 4 for financial returns on an annual basis, within 60 days from the end of the financial year.

Filing of Financial Statements, Auditors Report, and Directors Report

One of the most significant annual compliance for an Unlisted Company is to file annual audited financial statements with MCA. On the basis of section 129, 134, and 137 of the Companies Act 2013, together with Companies (Accounts) Rules 2014, every company needs to file a copy of Audited Financial Statements, Directors Report, and Auditors Report at the official MCA (Ministry of Corporate Affairs) portal, within 30 days, starting from the date of AGM (Annual General Meeting).

Filing of Annual Returns

On the basis of section 148 of the Companies Act 2013, together with Rule 6 (1) of the Companies (Cost Records and Audit) Rules 2014, the directors of an Unlisted Company requires to file E-form MGT 7 on an Annual Basis at the official MCA portal, within 60 days, starting from the date of Annual General Meeting.

Appointment of Cost Auditor

Based on the provisions of section 148 of the Companies Act 2013, together with Rule 6 (1) of the Companies (Cost Records and Audit) Rules 2014, every unlisted company needs to appoint a Cost Auditor within either within 30 days of the BM (Board Meeting) or within 180 days from the date of commencement of every financial year. Further, such an appointment will be made by filing E-form CRA 2 on an annual basis at the MCA portal.

Filing of Cost Audit Report

The last annual compliance for an Unlisted Company is to Cost Audit Report with the MCA (Ministry of Corporate Affairs). According to the provisions of section 148 of the Companies Act 2013, together with Rule 6 (6) of the Companies (Cost Records and Audit) Rules 2014, every unlisted company needs to file its Cost Audit Report in E-form CRA 4 (XBRL) on the official MCA portal. Further, such a report needs to be filed within 30 days of the receipt of the Cost Audit Report from the Cost Auditor.

Conclusion

In a nutshell, any company which is not listed on the recognized stock exchange and is not allowed to raise funds by offering shares to the general public is known as Unlisted Company. Further, these companies are governed by the provisions of the Companies Act 2013.

Further, it is mandatory for every unlisted company to adhere to the annual compliance required by it else, the same will be held liable for hefty penalties and fines by MCA.

Lastly, in case of any other doubt concerning Annual Compliance for an Unlisted Company or any other matter related to it, reach out to Swarit Advisors, we have a team of proficient CAs and CAs who are there to solve out all your problems.

Also, Read: Companies (Compromises, Arrangements & Amalgamation) Second Amendment Rules 2020

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Shivani Jain

Shivani has completed her B com LLB (Hons) and has the experience of writing various research papers during her college time. Earlier she was working as an Associate in a Delhi based Law Firm, but her interest in writing made her pursue Legal Content Writing as a career. Her core area of interest is in writing about various legal enactments, tax, and finance.

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