Company petition to NCLT -compounding and EGM to adopt accounts

[Jayanta Bandyopadhyay]

Would you please guide us in the following scenario :

FY 22-23--AGM took place to appoint auditor etc but not made it Adjourned to adopt standalone / consolidated (incl of wholly owned foreign subsidiary) financial statements -a mistake

FY 23-24- AOC4 was submitted but not MGT 7 & 8 as we can not mention date of proper AGM in FY 22-23

Planning to go to NCLT for compounding above non-compliance-- is there any direct course correction?

Please guide- how to resolve this

[YAGAY andSUN]

This situation involves non-compliance with the Companies Act, 2013, specifically regarding the annual general meeting (AGM) and filing of statutory returns. Here’s how you can approach this:

1. Understanding the Non-Compliance

• FY 22-23: The AGM was held, but not adjourned properly to adopt the standalone and consolidated financial statements, including those of the wholly owned foreign subsidiary (WOS).
• FY 23-24:AOC-4 was filed, but MGT-7 and MGT-8 were not, due to the inability to specify the AGM date for FY 22-23.

2. Potential Direct Course Correction (Without Going to NCLT)

Before resorting to the National Company Law Tribunal (NCLT) for compounding, consider these steps:

a. Filing of Missing Forms

• AOC-4 (if not already fully compliant): Ensure all required details are correctly updated, including the consolidated financials.
• MGT-7 & MGT-8: Once the AGM issue is rectified, file these forms with the correct AGM date.

b. Calling an EGM

• Purpose: To adopt the financial statements (standalone and consolidated) that were not adopted in the AGM.
• Notice: Issue a fresh notice for the EGM, specifying the date and agenda (adoption of accounts).
• Resolution: Pass the necessary resolutions to adopt the accounts.

c. Filing with Registrar of Companies (ROC):

• After the EGM, file the necessary resolutions and updated forms.
• AOC-4 (Revised): If required, to reflect the adoption of the financials.

3. If Direct Course Correction Isn’t Possible – Approach NCLT for Compounding

• Application for Compounding: File an application with the NCLT under Section 441 of the Companies Act, 2013, for compounding of offenses.
• Penalty: Be prepared to pay the prescribed fee/penalty, which is usually a fine or monetary penalty.

4. Important Considerations

• Legal Advice: Consult a company secretary (CS) or legal expert specializing in corporate law for specific advice tailored to your case.
• ROC Communication: Sometimes, the ROC may allow relaxation or guidance if you proactively approach them.
• Documentation: Keep thorough records of all communications, resolutions, and filings to support your case.

Hope that you'll find this reply to sort out your above mentioned issue.

AI Summary

Company Must Hold EGM to Adopt Financial Statements After AGM Failure, Then File MGT 7 & 8 Forms A company failed to properly adopt financial statements during its FY 22-23 AGM and subsequently couldn't file MGT 7 & 8 forms for FY 23-24 due to missing the proper AGM date reference. The recommended solution includes calling an EGM specifically to adopt the financial statements, then filing the missing forms with updated information. If direct correction isn't possible, the company should approach NCLT for compounding under Section 441 of the Companies Act, 2013, which would involve paying prescribed penalties. Consulting with a company secretary or legal expert is advised for case-specific guidance.