Annual Filing of Companies: Jammu and Kashmir

The Union territory of Jammu and Kashmir (J&K) offers a large number of investment opportunities for entrepreneurs as the UT is rich in certain resources such as agro, water, herbal, forests, and minerals. 

Additionally, this area owns unparalleled natural beauty which connects a market for the consumers as well as provides a platform for entrepreneurs to establish a set-up of the company owing to the increasing opportunities.
Jammu and Kashmir is an unbothered area and it has a lot of small-scale industries, manufacturing industries, cottage industries, etc. However, a lot of locals are unaware of the statutory compliances related to trade and commerce in the Union Territory of Jammu and Kashmir. This article significantly discusses the concept of Annual Filing and Registrar of Companies (ROC) in J&K.

Abstract

Every company that is registered within India such as a limited company, one-person company, private limited company, or a section 8 company requires maintaining certain annual compliances every year such as;

• Annual Returns, and 
• Income Tax return (ITR) 

Entities within J&K, being a part of India, have to follow the same regulatory structure. Company Registration is a familiar form of starting a business and is known among individuals commonly.
However, there are certain compliances that the business entities in Jammu and Kashmir need to follow when their companies are incorporated.

Meaning of Annual Returns

An Annual return is a yearly statement that contains important information regarding activities, composition, and financial position of the Company/business entity.
Every registered company in Jammu and Kashmir, India that is actively carrying out its business needs to file an Annual Return at the end of every fiscal year with the appropriate authority.

The objective of Annual Filing for Company

The objective of the provision of filing annual returns by companies is to confirm that;

• Companies are actively carrying their business in the market,
• If the business is newly incorporated, then it will commence in the near future, and
• That the trade or business of a particular entity is not abandoned by the concerned company

If an annual return is not filed by the company in Jammu and Kashmir for three consecutive years, then under the Companies Act, 2013, the director(s) of such company would be penalized according to the Companies Act, 2013 and would also be disqualified from such designation.

Annual Filing of Company in Jammu and Kashmir

Every form of Company such as a Limited Company, One Person Company, Private Limited Company, or a Section 8 Company that is registered in Jammu and Kashmir is required to file annual returns every year with the Ministry of Corporate Affairs (MCA).
The companies also require to file Income Tax Returns (ITR) along with filing an Annual Return with the MCA. 

Annual General Meeting: Before filing the annual returns, the companies have to necessarily hold an AGM (Annual General Meeting) at the end of the fiscal year. However, the companies that are newly incorporated, such companies have to hold an AGM within 18 months from the date of the incorporation of such a new company.
The financial year starts on the first day of the month of April (1 April) and ends on the last day of the third month of the calendar (i.e. March 31).

Holding of Annual General Meeting: Subsequently, Annual General Meetings (AGM) shall be held at the earliest of the following dates:

• Within fifteen months (15 months) from the date of the previous Annual General Meeting,
• Last day of every calendar year (i.e. 31st December), and
• Within six months (6 months) from the end of every Financial Year

Miscellaneous Information: Apart from it, the companies are also required to file some other relevant information regarding the company through ITR regardless of loss, profit or income.
Therefore, even companies that are inactive and are not making any active business deals are also required to file ITR each year.

The procedure of Annual Return Filing

The annual Return filing procedure for the companies in Jammu and Kashmir can be observed as follows;

• Board Meeting for Auditor– Firstly, a Board Meeting must be conducted for appointing an auditor to prepare and research the financial statements of the company according to Schedule III of the Companies Act, 2013,
• Preparation of Reports– Then the Secretary or the Director of the company must prepare the Annual Return and the Board Report as per the provisions mentioned under the Companies Act, 2013,
• Board Meeting for Drafts– After the preparation of the Reports, another board meeting must be conducted for the approval of the drafts prepared of declared financial statements of the company,
• Supervision of Reports– The directors of the company must prepare and supervise the Board Report and the Annual Return,
• Annual General Meeting– After which the entities must authorize the required declarations of the company and hold the AGM (Annual General Meeting). 

The company’s financial statements are finalized when the shareholders approve those documents during the AGM. 

Documents Required for Annual Filing

Companies in Jammu and Kashmir while filing an annual return, have to attach certain documents on the portal of the authority. The documents that are required while such filing is listed below;

• Profit & Loss Account documents,
• Balance-Sheet documents,
• Cost Audit Report documents, and
• Annual Return documents

E-Forms required for filing Annual Returns in J&K 

Companies that are integrated under the Companies Act 2013 are required to file the information through the following E-Forms for filing Annual Returns with the ROC;

• Form 23AC– This form is used to file the Balance Sheet of the company and it is applicable for every type of company,
•  Form 23ACA– This form is used for filing of Profit and Loss Account of the company,
• Form 23AC-XBRL– This form is used to file the Balance Sheet (in XBRL format),
• Form 23ACA-XBRL– it is required for filing the P&L (Profit and Loss) Account and is applicable only to selected classes of companies,
• Form 20B– This form is required for filing the Annual Returns by the Companies holding share capital,
• Form 66– This form is required for filing CC (Compliance Certificate) for Companies that have a paid-up capital of 10 lakh Rs. to 5 crore Rs.,
• Form 21 A– This form is required while filing Annual Returns by the Companies that do not hold any share capital,
• Form AOC-4: This form is required for filing financial statements and other such necessary documents for certain categories or classes,
• Form AOC4- CFS– This form is required for filing of such statements that contain features and elements of the consolidated financial statement of a categorized group,
• Form AOC4-XBRL– This form is required for filing the financial statements and other relevant documents (in XBRL format),
• Form MGT-7– This form is required for filing Annual Returns by all the Companies 

Authority of Annual Filing (ROC)

The governing authority that regulates the registration, filing of annual returns, and other relevant compliances regarding companies in Jammu and Kashmir is the ROC of J&K.

Such compliances, regulatory administration, and registration of companies are regulated by the provision of the Companies Act, of 2013. The activities of the companies are regularly administered by the MCA (Ministry of Corporate Affairs) through the Office of ROC in J&K.

Conclusion

Managing the functions and operations of a business regularly and complying with all the regulations and rules of the corporate law altogether can be a tedious task for entrepreneurs. 

In such a situation it is better to be aware of the compliances and all the required actions that the companies have to take to run their businesses efficiently and without any fear of fines or penalties.

It is always suggested to consult professionals for understanding the legal requirement and ensuring fulfillment of the necessary compliances related to Companies. Such activeness with compliance can save the business entities from all the possible penalties or fines that can be levied by the authorities in case of default.