New MCA forms for financial statements by July: Govt
May 11, 2023
The Ministry of corporate affairs is set to introduce 30 new online forms for statutory filings under the Companies Act by the end of July, marking the final leg of the transition to an artificial intelligence (AI)-enabled corporate reporting regime.
Following the integration of financial statements and large-volume transactions into the system, regulators will be able to detect trends in a company’s financial health, governance, and defaults more efficiently.
The new forms will include critical reporting requirement like financial statements (form AOC-4) and annual returns (form MGT-7), a person in the know said, seeking anonymity.
The government will also introduce forms that companies might have to file in certain circumstances under the Companies Act of 1956, which was modified in 2013.
With this the ministry will complete the tech upgrade of the reporting regime, he said.
Government data showed that since the launch of the 40 new forms on 23 January, over 400,000 filings were submitted by businesses and professionals, including for incorporation and name reservation, on the upgraded version (III) of the MCA21 reporting portal.
In case of limited liability partnerships, which also use the same portal for reporting, more than 521,000 forms have been filed in FY23, compared to 474,000 in the year before, data from the ministry website showed. This suggests that the transition is stabilising and the businesses are filing in large numbers using the new forms.
Industry representatives, however, said they would prefer more time for filing financial statements and annual returns in new forms given that the massive technology upgrade for the 1.5 million active companies had faced teething issues initially. The ministry has deployed special teams to address public grievances on priority and to monitor the issues on a daily basis.
“Considering the recent technical challenges being faced, the ministry may reconsider the timing for introducing newer versions of annual filing forms at the version three portal," said Virender Bhasin, Executive Director at Nexdigm, a business and professional services firm. Bhasin said that since the filing is mandatory for every company, a lot of technical challenges and internet traffic related issues could crop up in case these forms are introduced at V3 portal now.
Companies have six months to hold annual general meeting after the end of the financial year and they have one month from the date of AGM to file financial statements and 60 days from the AGM date to file annual returns, without additional fee which is ₹100 per each day of delay.
The new version of the forms involves two-factor authentication, which brings a cultural shift in the way forms and documents are filed in the system. The additional security features had led to a section of the professional community facing technical issues while filing documents due to data and ID related mis-matches.