What happens if a company fails to file its annual report?

When a company fails to file its annual report, one of the consequences is that the Registrar has the authority to dissolve the company. This action is generally taken as part of the regulatory framework that ensures compliance with corporate governance requirements. Annual reports are vital as they provide transparency regarding a company's operations, financial health, and adherence to legal obligations.

Failure to file these reports signals non-compliance with regulatory standards, and the Registrar's ability to dissolve the company serves as a deterrent to neglecting these responsibilities. While other penalties such as fines or suspensions may arise, the dissolution of the company reflects the serious nature of compliance with reporting requirements, especially as it can impact creditors, shareholders, and other stakeholders associated with the company.

This mechanism ensures that companies cannot continue to operate while disregarding their legal obligations, maintaining the integrity of the corporate structure and protecting public interest.