Statutory Compliances for Companies and Consequences of Non Compliance

CA Anil Kumar Buna 
on 23 August 2019


Statutory Compliance's for the Companies in India:

1) Books of Accounts has to maintained as per section 128 of the Companies Act, 2013
2) Financial Statements has to be Prepared as per section 129 of the Companies Act, 2013
3) Appointment of Auditor & Audit of Financial Statements as per section 139 of the Companies Act, 2013
4) Filing of Financial Statements & Annual Returns with ROC
5) DIR 3 KYC for all the Directors for every year
6) Holding and Conducting the mandatory Board Meetings and AGM
7) Filing of MBP 1 & DIR 8 with the Company by every Director
8) Directors Report as per section 134 of the Companies Act, 2013
9) GST Monthly & Annual Returns by every registered person under GST
10) Income Tax Return  for every financial year

Below are the Consequences of Non Compliances:

1) Non Maintenance of Books of Accounts as per Section 128 of the Companies Act, 2013.

 Managing director, whole-time director in charge of finance, Chief Financial officer or such other person of the company shall be punishable with imprisonment for a term which may extend to 1 year or with fine which shall not be less than Rs. 50,000/-  but which may extend to Rs. 5,00,000/- or with both

2) Non Compliance with Section 129 of the Companies Act, 2013

On Contravention of this provision, the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person charged by the Board with the duty of complying with the requirements of this section and in the absence of any of the officers mentioned above, all the directors shall be punishable with imprisonment for a term which may extend to 1 year or with fine which shall not be less than Rs. 50,000 but which may extend to Rs. 5,00,000, or with both.

3) Non Compliance with Audit & Auditor Appointment Provision under the Companies Act, 2013.

If Company contravened the above provisions, the company shall be punishable with fine which shall be Rs. 25,000/- to Rs. 5,00,000/- and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 1 year or with fine which shall not be less than Rs. 10,000/- but which may extend to Rs.1,00,000/-, or with both.

4) Non Filing of Financial Statements & Annual Returns with ROC

If a company fails to file the copy of the Financial Statements with ROC, before Due date, the company shall be liable to a penalty of Rs. 1,000/- per day during which the failure continues but which shall not be more than Rs. 10,00,000/-, and the MD and CFO of the company, if any, and, in the absence of the MD and the CFO, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be liable to a penalty of Rs.1,00,000/- and in case of continuing failure, with further penalty of Rs.100/- per day after the first during which such failure continues, subject to a maximum of Rs. 5,00,000/-

If any company fails to file its annual return before the expiry of the period specified therein, such company and it's every officer who is in default shall be liable to a penalty of Rs. 50,000/- and in case of continuing failure, with a further penalty of Rs. 100/- per day during which such failure continues, subject to a maximum of Rs. 5,00,000/-.”

5) Non Filing of DIR 3 KYC by Director of the Company

All Individual who has not filed DIR 3 KYC, can file the same anytime by paying a one-time filing fee of Rs. 5,000 as ROC Fees.

6) Non-Holding & Conducting of Board Meetings and AGM

Section 173(4) of the Act says that “Every officer of the company whose duty is to give notice for Board Meeting and who fails to do so shall be liable to a penalty of Rs. 25,000/-.”

7) Non-filing of MBP 1 & DIR 8 with the company by every director

if any director contravenes the above provisions such director shall be punishable with imprisonment for a term which may extend to 1 year; or with fine which shall not be less than Rs. 50,000 but may extend to Rs. 1,00,000; or Both.

Further, as per Section 189 (6), every director contravening provisions of the section shall be liable to a penalty of Rs. 25,000.

8) Non Compliance with Section 134 of the Companies Act, 2013.

If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than Rs.50,000/- but which may extend to Rs.25,00,000/- and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 3 years or with fine which shall not be less than Rs.50,000/- but which may extend to Rs. 5,00,000/-, or with both.

9) Non-filing of GST Monthly and Annual GST Returns

Penalty on Non Filing of Annual Returns within Due date: Rs. 100/- per act per day i.e Rs.200/- per day after the due date

Penalty for Non-filing of Monthly GST Returns within Due date: Rs. 25/- per Act per Return per day i.e. Rs. 100/- per day

Interest on Late Payment of GST: 18% per annum 

10) Income Tax Return for every Financial Year

Late filing Fees for Income Tax Return is Rs. 10,000/-


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