What Does Annual Return of a Company Tell You?
What Does Annual Return
of a Company Tell You?
Online GST Return An
Annual Return is a snapshot of ownership and management of a company. Every Indian
company is required to file its Annual Return to the Registrar of Companies,
every year after holding its Annual General Meeting on completion of the
financial year. In this article, we will discuss the information that is
revealed by an annual return of the company.
What is an AGM? Annual General Meeting (AGM) is an annual
meeting of shareholders that is held once in year. It is mandatory by law and
every company is required to hold an AGM. Therefore, all the members, directors
and shareholders of the company meet at the AGM, discuss and approve the
Financial Statements, Auditors Report and other things, if any. After they
approve, the Balance Sheet and Auditors Report are finalized and filed with the
Ministry of Corporate Affairs.
There are several
components which combine and form the annual return, they are:
1. Basic Details
In the first part of the Annual Return, you will find the
basic details of the company. This includes the registration number, state of
registration of the company, the full legal name, email address and the
physical address. The date on which the Annual General Meeting was held is also
mentioned.
2. Capital structure
This section explains the capital structure of the company.
How much Equity or preference capital has the Company raised? How many shares
has the company issued? How much is the authorized and paid up capital? This
section also details the broad categories of the shareholders who hold shares
vizDirectors, Foreign companies, Mutual funds, Government, etc.
3. Directors detail
The details of directors of the company also form part of the
annual return. Their name, identification number, designation, date of
appointment and equity shares held by them are stated in the annual return. It
also gives details of those directors who left in the last year. Apart from the
directors, the annual return may also include details of the manager and the
secretary of the company.
4. Debentures
The detail about debentures of the company is also covered.
How many debentures have been issued by the company? How many of them are fully
convertible, partly convertible or non-convertible. What is the nominal value
of each debenture? All these details are mentioned in the annual return.
5. Shares
The detail of shares includes the details of shares at the
time of AGM of the company. It includes the name of the shareholders, the
equity shares held by them and the percentage holding in the company. The
annual return also reports the transfer of shares taken place during the
reporting year.
6. Certification And
Verification
The annual return is usually certified by two directors of
the company, authorized by the board to sign and verify the returns of the
company before filling them up to ROC. It is a clear sign that the return shave
now been checked and are ready to be uploaded.
An annual return is easy to read and understand. It describes
all the basic details of a company. The annual return of the company is
submitted as an attachment in E FORM 20B which is specifically meant for
filling of the return within 60 days of the Annual General Meeting (AGM).
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