As you are aware, AOC-4 includes the company’s financial statements, such as the Balance Sheet, Profit & Loss Account, and Auditor’s Report, while MGT-7 provides details regarding shareholders, directors, corporate structure, and compliance status and the Companies Act, 2013 provides clear timeline for filing these forms.

It is important to note that failure to file these forms on time will not only incur an additional fee of ₹100 per day but may also lead to significant consequences that many small business owners may not fully comprehend.

To facilitate a smoother business environment, the Companies Act offers various exemptions for small companies. Notably, one significant exemption allows small companies to hold only two board meetings annually, whereas larger companies are required to conduct at least four meetings each year.

However, if there is a delay in filing these forms, the company will forfeit this benefit and will be required to hold four meetings in the subsequent year.

Many companies may be unaware of this requirement and may continue to operate under the assumption that they can hold only two meetings, which would result in a violation of the Companies Act provisions. If this situation persists over several years and is subsequently uncovered, such a lapse will result in heavy penalties, the financial burden might cause significant stress to the company’s bottom line.

Furthermore, the directors will bear personal liability for this oversight and will be subject to penalties alongside the company. While a company may mitigate delays for other forms, it is crucial to file the AOC-4 and MGT-7 within the stipulated timeframe to maintain the associated benefits and safeguard directors from personal liability.