Why is ROC filing important for companies? Explained

Overview : In this rapidly evolving business ecosystem, focusing solely on business growth can't guarantee sustainable success; handling compliance and regulatory requirements is also necessary. ROC filing is one of the compliance requirements that needs to be properly fulfilled within a specified time. In this blog, we'll dig deeper into ROC filing and shed light on its key aspects.

Registrar of Companies (ROC) filing, as the name implies, refers to the filing returns and submitting required documents to the ROC. It's mandatory for every company registered in India to adhere to some filing requirements annually. Upon failing to file ROC compliance, companies may have to face some penalties and legal punishments. Therefore, it is important to file these returns within the prescribed time. The article focuses on why ROC filing is needed for companies.

What is ROC?

ROC's full form goes as 'Registrar of Companies', which is a regulatory body registered under the Ministry of Corporate Affairs (MCA) and is entrusted with managing the database of companies registered in India. The reason behind maintaining the companies' database is to oversee their functioning, ensuring transparency across the corporate landscape in India. ROC filing mainly includes the following requirements;

• Annual financial statements
• Annual returns

Sections 129 and Section 137 of the Companies Act 2013 state that every company should file audited financial statements while the Section 92 of the Companies Act 2013 mandates filing annual returns to the ROC.

Why is ROC filing important for companies?

ROC filing is crucial to maintain accurate and fully updated records of a company that not only reflects its legal compliance status but also its commitment to transparency. ROC filing is helpful in a number of ways, some of which are as follows;

• Legal Compliance : Companies registered in India are obliged to file their annual financial statements and Annual Returns regularly with ROC. These filing help companies ensure compliance and keep penalties associated with non-compliance at bay.
• Maintain Transparency : ROC filing demonstrates that a company is committed towards transparency which helps in building trust among stakeholders of the company such as customers, suppliers, investors and lenders. Such practices help ensure transparency across the business world.
• Ensure Smooth Business Operations : ROC filing is vital for many business operations such as opening a company's bank account, availing loans, and having a contractual agreement with clients and other business associates.

Process of ROC Filing in India

ROC filings vary from company to company as per the type of filing they need to undergo. Before going for any ROC filing, it's important to check if all the required information and documents are available in the prescribed format beforehand to avoid delay or even rejection of filings.

Step 1: Arrange necessary documents : ROC filing process begins with collecting information and arranging necessary documents required for filings. It may include incorporation documents, financial reports, and such other related documents.

Step 2: Filing with ROC : Upon completion of documents preparation with sign, file the documents with the ROC. It can be executed by accessing the Ministry of Corporate Affairs (MCA) Portal.

Step 3: Making Fees Payment : Pay the required filing fees online as per your filing.

Step 4: Verification & Approval : After making fees payment, the ROC will verify the submitted information and documents. It may also ask for some additional information or documents for further clarification. Upon successful verification, ROC will approve the filings.

Step 5: Compliance Certification : Eventually, the ROC will issue a certificate of compliance upon validation and satisfaction of the documents.

Due Date for ROC Filing

Similar to other compliance requirements, there are also specified deadlines or due dates for filings with ROC. Depending upon the type of filing, ROC filing may vary. The Due Dates for ROC filing includes;

• Every Company must file the financial statement form within 30 days of the annual general meeting.
• The annual returns company with a share capital must be filed within 60 days of the Company's annual general meeting.

Adhering to these due dates is crucial to ensure ROC filing compliance and avoiding penalties. As a result, the stakeholders have access to necessary information about a company, which helps build trust and ensures transparency.

Penalty for Late ROC filing

The penalty amount is directly proportional to the number of days the applicant delays. The table below displays the amount of late ROC filing penalties;

Conclusion

ROC filings are not mere compliance requirements for the companies registered in India but they help build trust among stakeholders and create a transparent business ecosystem. Each company must adhere to ROC filings to ensure compliance and maintain transparency across the corporate environment.

Author Bio

Editorial Team | in

Setindiabiz Editorial Team is a multidisciplinary collective of Chartered Accountants, Company Secretaries, and Advocates offering authoritative insights on India’s regulatory and business landscape. With decades of experience in compliance, taxation, and advisory, they empower entrepreneurs and enterprises to make informed decisions.