Company petition to NCLT -compounding and EGM to adopt accounts, Corporate Laws / SEBI / LLP

[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

Posts / Replies

[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.