Sections 137 and 138 of the Companies Act 2013: Filing Financial Statements and Internal Audit
Sections 137 and 138 form part of Chapter IX, Accounts of Companies, of the Companies Act, 2013. Section 137 governs filing of financial statements and prescribed accompanying documents with the Registrar of Companies. Section 138 provides for internal audit by prescribed classes of companies.
- Financial statements adopted at the annual general meeting are ordinarily filed with the Registrar within 30 days of the AGM.
- If the statements are not adopted, the unadopted statements are filed provisionally within the statutory period and the adopted statements are filed after the adjourned AGM.
- A One Person Company has a special filing period of 180 days from the closure of the financial year.
- Section 137 now provides monetary penalties for failure to file, including an additional daily penalty for continuing default, subject to statutory maximums.
- Section 138 requires prescribed classes of companies to appoint an internal auditor to audit the functions and activities of the company.
Section 137 - Copy of Financial Statement to be Filed with Registrar
Section 137 requires a company to file its financial statements, including the consolidated financial statement where applicable, together with documents required to be attached under the Act. The filing requirement connects the company's annual financial reporting process with the public records maintained by the Registrar of Companies.
Meaning and normal filing deadline
Where the financial statements are duly adopted at the annual general meeting, a copy of those statements, including the consolidated financial statement if any and the required attachments, must be filed with the Registrar within 30 days from the date of the AGM, in the prescribed manner and with the prescribed fee or additional fee.
Where financial statements are not adopted at the AGM
If the financial statements are not adopted at the AGM or at the relevant stage contemplated by the section, the unadopted financial statements and required documents must still be filed within 30 days from the date of the AGM. The Registrar keeps those statements as provisional records. Once the statements are adopted at the adjourned AGM, the adopted statements must be filed within 30 days from the date of that adjourned AGM.
One Person Company
A One Person Company must file a copy of its financial statements, duly adopted by its member and accompanied by the documents required to be attached, within 180 days from the closure of the financial year.
Foreign subsidiaries of an Indian company
Section 137 also requires the company, while filing its financial statements, to attach the accounts of subsidiaries incorporated outside India that have not established a place of business in India. Where an overseas subsidiary is not required by the law of its country of incorporation to have its financial statements audited and does not have them audited, the holding Indian company may comply by filing the unaudited statements with the required declaration. If those statements are not in English, an English translation is also required.
Where no AGM has been held
If the annual general meeting has not been held, the financial statements and required attachments, duly signed, must be filed together with a statement setting out the facts and reasons for not holding the AGM. The filing is required within 30 days from the last date by which the AGM should have been held.
Form used for filing
Under the Companies (Accounts) Rules, 2014, financial statements are filed with the Registrar through the applicable AOC-4 form. The MCA has moved company annual filing forms to its V3 system, and companies should use the current form and instruction material available on the MCA portal at the time of filing. See the Ministry of Corporate Affairs portal.
Penalty for failure to file under Section 137
Section 137(3) provides a civil penalty regime for default in filing the financial statements within the applicable statutory period.
| Person in default | Base penalty | Continuing failure | Maximum |
|---|---|---|---|
| Company | Rs. 10,000 | Further Rs. 100 for each day during which the failure continues | Rs. 2,00,000 |
| Responsible managing director, CFO, designated responsible director, or directors as provided by Section 137(3) | Rs. 10,000 | Further Rs. 100 for each day after the first during which the failure continues | Rs. 50,000 |
The penalty language reflects the decriminalisation amendments made to Section 137, including changes by the Companies (Amendment) Act, 2019 and the Companies (Amendment) Act, 2020. The current statutory text should always be checked before advising on a specific default.
Section 138 - Internal Audit
Section 138 creates the statutory framework for internal audit. It requires such class or classes of companies as may be prescribed to appoint an internal auditor. The internal auditor may be a chartered accountant, a cost accountant, or another professional selected by the Board.
The purpose of the internal audit is to examine the functions and activities of the company. The Central Government is empowered to prescribe, through rules, the manner and intervals in which the internal audit is to be conducted and reported to the Board.
Who may act as internal auditor?
The statutory provision permits a chartered accountant, a cost accountant, or such other professional as the Board may decide. Applicability to a particular company and the operational requirements are governed by Section 138 read with the Companies (Accounts) Rules, 2014, as amended.
Why Section 138 matters
Internal audit is a governance and risk-control mechanism rather than the statutory financial statement audit under Chapter X. It assists the Board by reviewing internal processes, controls, compliance and business functions at the intervals and in the manner applicable to the company.
Difference between Sections 137 and 138
| Point | Section 137 | Section 138 |
|---|---|---|
| Subject | Filing financial statements with the Registrar | Internal audit of prescribed companies |
| Primary compliance | Timely filing of annual financial statements and attachments | Appointment of an eligible internal auditor and conduct of internal audit |
| Key authority | Registrar of Companies | Board of Directors and prescribed internal audit framework |
| Rules | Companies (Accounts) Rules, 2014, including applicable AOC-4 filing requirements | Companies (Accounts) Rules, 2014, including the rule prescribing classes of companies |
Official legal resources
For the authoritative and updated statutory text, amendments, rules, forms and filing instructions, refer to the Ministry of Corporate Affairs and India Code. Filing requirements can be affected by amendments, notifications, form revisions and MCA portal changes, so the current official material should be checked for live compliance work.
Updated: 17 September 2026. This article is intended as a general legal information resource and does not replace professional advice on the facts of a particular company or filing default.