Expert Guidance on Compliance for Private Limited Companies
Navigating compliance can be a complex challenge for private limited companies in India. Adhering to the comprehensive requirements of the Companies Act 2013, including director appointments, shareholder meetings, and other regulatory obligations, is crucial but can often seem overwhelming.
That’s where Audit Needs steps in. We provide expert guidance and comprehensive solutions tailored to your company’s needs, simplifying the compliance process from registration to ongoing obligations. Our team of specialists is equipped with in-depth knowledge of Indian business laws and regulations, ensuring your company meets company compliance requirements. Whether you are a startup or an established enterprise, Audit Needs is your partner in simplifying compliance.
Let’s make Company compliance hassle-free together! Get Started now!
Compliance for Private Limited Company
Compliance refers to adhering to orders, rules, or requests. For a private limited company incorporated in India, Compliance with the Companies Act 2013, which includes obligations to the Registrar of Companies (RoC), is essential for private limited companies in India. This legislation governs various aspects, including the appointment, qualification, remuneration, and retirement of directors and the conduct of board and shareholder meetings. Compliance with Registrar of Companies (RoC) regulations is mandatory for every private limited company, regardless of turnover or capital amount.
- Compliance Related to the Registrar – ROC Complaince
- Compliance Beyond the Registrar’s Purview – Non-Registrar compliance
ROC Compliance for Private Limited Company
As mentioned above, These are obligations that a company must fulfil in accordance with the regulations set by the Registrar of Companies (ROC) or equivalent authority. They typically involve statutory filings and adherence to the Companies Act provisions.
Ensuring adherence to ROC compliance is pivotal for companies operating in India. ROC Compliance for Private limited company can be broadly classified into:
- Annual Compliance: These are the regular, yearly filings and disclosures companies must make, including submitting annual returns and financial statements.
- Event-Based Compliance: These are specific compliances that need to be addressed as and when certain events occur within the company, such as changes in the company’s management, share capital, or registered office.
- Other Compliances: This category includes a range of other regulatory obligations that might not fall strictly under annual or event-based categories but are essential for maintaining the company’s legal status, such as director KYC updates and maintenance of statutory registers.
Annual Compliances for Private Limited Company
Annual compliances are a critical aspect of corporate governance for companies registered in India. Key annual compliances include:
INC-20A: Declaration for Commencement of Business
For companies registered in India post-November 2019 with a share capital, securing a Commencement of Business Certificate is a prerequisite before initiating any business activities or exercising borrowing powers. This certificate must be acquired within 180 days of incorporation by filing Form INC-20A.
Failure to obtain this certificate results in penalties, with the company facing a fine of Rs. 50,000 and directors being charged Rs. 1,000 per day for each non-compliance, underscoring the importance of promptly adhering to this regulatory requirement.
Appointment of Auditor and Filing E-form ADT-1
The first auditor must be appointed within 30 days of incorporation and ratified by the shareholders during the first Annual General Meeting (AGM). Following the AGM, Form ADT-1 confirming the auditor’s appointment must be filed with the Registrar of Companies (ROC) within 15 days.
Board Meetings
The first board meeting should be held within 30 days of incorporation. Subsequently, companies must hold at least four board meetings every year, ensuring that the interval between two meetings is at most 120 days.
Further, the discussion in the meeting needs to be drafted and recorded in the minutes and maintained at the company’s registered office.
A notice should be given seven days in advance about the meeting’s date and purpose.
Annual General Meeting (AGM)
The first AGM should be conducted within nine months from the closure of the first financial year. For subsequent years, the AGM must be held every year within six months from the end of the financial year, ensuring that the gap between two AGMs is at most 15 months.
AGMs are held for approval of financial statements, declaration of dividends, appointment or re-appointment of auditors, commission, remuneration of directors, etc.
The meeting is held during business hours on a day that is not a public holiday. It shall occur at the company’s registration or the city, village, or town in which the registered office is situated.
Annual ROC Filings
Private Limited Companies must file annual accounts and returns to the companies’ registrar, disclosing the details of their shareholders, directors, etc.
As a part of the annual compliance for private limited company, the following forms are to be filed with the ROC:
AOC-4: Filing of Financial Statements
This form is for filing the company’s financial statements and must be submitted within 30 days following the Annual General Meeting (AGM).
MGT-7 – Annual Returns
Form MGT-7 (Annual returns) must be filed within 60 days of the annual general meeting
DIR-12: Appointment/Resignation of Directors
This form pertains to changes in the company’s directorship, including appointments and resignations, and must be filed within 30 days of such changes.
DIR-3 KYC: Director KYC Submission
Directors are required to submit their KYC details through Form DIR-3 by September 30th each year, provided their Director Identification Number (DIN) was allotted by March 31st of that year and the status is ‘Approved’. Failure to file DIN eKYC results in a penalty of Rs. 5000.
DPT-3: Return of Deposits
Companies must use this form to report details of deposits and other non-deposit receipts annually by June 30th.
Directors’ Report
An abridged version covering all required information for small companies under Section 134 must be prepared. It should be authorized by the Chairperson or at least two directors.
Maintenance of Statutory Registers and Books of Accounts
Companies must maintain and regularly update various statutory registers and records, including minutes of board meetings and AGMs, books of accounts, financial statements, and files with the ROC.
Circulation of Financial Statements and Other Relevant Documents
Companies must send approved financial statements, along with the Directors’ and Auditors’ reports, to all members at least 21 clear days before the AGM.
For ready reference, below is a table summarizing the annual compliances for private limited company and their respective due dates:
| Annual compliances for Private Limited Company | Due Date |
|---|---|
| Commencement of Business Certificate (COB) | Within 180 days of incorporation |
| Appointment of Auditor and Filing E-form ADT-1 | Within 15 days of the AGM |
| Holding Board Meetings | As per the schedule of board meetings |
| Conducting the Annual General Meeting (AGM) | Within 9 months from financial year-end |
| INC-20A: Declaration for Commencement of Business | Within 180 days of incorporation |
| AOC-4: Filing of Financial Statements | Within 30 days of the AGM |
| MGT-7A: Annual Returns for Small Companies/OPCs | Within 60 days of the AGM |
| DIR-12: Appointment/Resignation of Directors | Within 30 days of appointment/resignation |
| DIR-3 KYC: Director KYC Submission | By September 30th each year |
| MGT-14: Filing of Board Resolutions | Within 30 days of passing the resolution |
| DPT-3: Return of Deposits | By June 30th each year |
| Directors’ Report | At least 21 days before the AGM |
| Maintenance of Statutory Registers and Books of Accounts | Throughout the financial year |
| Circulation of Financial Statements and Other Relevant Documents | At least 21 days before the AGM |
Event-Based Compliances for Private Limited Company
Besides the annual filings, there are various other compliances that need to be compiled with on occurrence of any event in the company.
Here are specific instances of such events:
- Change in the authorized capital or the paid-up capital of the company.
- Allotment of new shares or transfer new shares
- giving loans to other companies
- giving loans to directors
- Appointment of managing or whole-time Director and their payment
- when a bank account is opened or closed, or there is a change in the signatories of a bank account.
- if there is an appointment or change of the statutory auditors of the company
It is necessary to file different forms with the registrar for all such events within a specific period. In case of missing out on this, additional fees or penalties might be levied. Hence, it is necessary to meet such compliances on time.
Non-Registrar compliance
These regulatory obligations do not directly involve the ROC but are essential for lawful business operations. They may be governed by various other regulatory bodies and laws, depending on the nature of the business, its size, and the industry it operates in. These include:
- Payment of Periodic Tax Due: Regular payment of Goods and Services Tax (GST) liability, Tax Deducted at Source (TDS), Tax Collected at Source (TCS), Advance Tax, and Professional Tax (PTax).
- Filing of Periodic Returns:
- Monthly/Quarterly/Annual GST Returns
- Quarterly TDS Returns
- Filing of Income Tax Returns
- Filing of Tax Audit Report
- Filing of half-yearly Employees’ State Insurance Corporation (ESIC) returns
- Filing of Provident Fund (PF) returns
- Filing of professional tax (PTax) returns
- Regulatory Assessment and Reporting: Compliance with various regulatory assessments and reporting requirements under different acts of law, such as the Environment Protection Act, Competition Act, and Factory Act.
Non-compliance Penalty
Non-compliance with the rules and regulations of the Companies Act in India can result in penalties for the company and its defaulting members. Penalties typically involve fines imposed for the duration of the non-compliance. Additionally, delays in annual filings may incur additional fees. Therefore, companies should fulfil their compliance obligations promptly to avoid penalties and financial repercussions.
Streamline Company Compliance with Audit Needs
With Audit Needs, entrepreneurs can seamlessly complete their company compliance requirements. Here’s how we can help:
LEDGERS Compliance Platform
We offer access to the LEDGERS compliance platform, which is designed to streamline compliance tasks. Entrepreneurs can use this platform to manage their compliance obligations efficiently, track deadlines, generate reports, etc.
Dedicated Advisor
Your company will be assigned a dedicated Compliance Manager who will be a single point of contact to help you maintain the compliance for your company. You can get in touch with your Compliance Manager at anytime and get assistance on matters related to your Company’s compliance.
Accounting
All companies are required to maintain accounts and prepare financial statements at the end of each financial year. Our Compliance Manager will help your company maintain accounts and will prepare the financial statement for your business at the end of financial year.
Secretarial Services
Companies are required to conduct a minimum of four board meetings, an annual general meeting, Directors Report and Annual Report each financial year. Our Compliance Manager will help you prepare minutes of board meetings and create all secretarial reports.
MCA Annual Return Filing
Annual General Meeting should be held by a company within 6 months from the end of that financial year. And MCA annual return must be filed on or before September 30th. Our Compliance Manager will prepare all the documents and file your company’s MCA annual return.
Income Tax Return Filing
Income tax return of a company must be filed irrespective of income, profit or loss. Hence, even dormant companies with no transactions are required to file income tax return each year. Our Compliance Manager will prepare all the documents and file your company’s income tax return.
Ready to streamline compliance effortlessly? Let Audit Needs be your trusted partner. Get started today and experience hassle-free compliance management.
Renewal of DSC (Digital Signature Certificate)
Digital Signature Certificates (DSCs) are not valid for a lifetime; It is valid for a specific period, mostly one or two years, after which they need to be renewed to maintain their legal validity. Failure to update your DSC on time may lead to problems with online files, deals, and legal compliance and the renewal process of a DSC is a straightforward process and involves verifying the identity of the certificate holder. To renew your DSC, you need to submit the necessary documents and follow the guidelines set by the Certifying Authority that issued your original certificate.
By constantly renewing your DSC, you can maintain a smooth digital process and support the security and validity of your online contacts. At Audit Needs, we provide assistance with the renewal process, taking you through the necessary steps to ensure your DSC stays valid and up-to-date for continued use in your online activities.
Why Choose Audit Needs?
With over 50,000 satisfied clients, Audit Needs has earned a reputation as one of the most trusted names for Digital Signature Certificate (DSC) services. Our team of experts are here to help you in the following ways?
- Expert Guidance: Our experts shall assist you throughout the DSC application process. Whether you are a young entrepreneur looking for a new DSC or an existing user looking to renew your certificate, we ensure you that you understand everything in the filing process and avoid any unnecessary complications.
- Simple and Fast Process: We understand the importance of your time. For this reason, our team has broken the process down into manageable steps for you. Our efficient approach guarantees that you won’t be kept waiting or snagged on pointless paperwork.
- Affordable Pricing: We believe that obtaining your DSC should not be expensive. For DSC registration, Audit Needs provides reasonable prices that offer great value without sacrificing product or service quality.
- Committed Customer Service: At Audit Needs, we prioritize our customers. Our customer service representatives are here to assist you with your questions and concerns around the clock. Our goal is to ensure that the procedure goes smoothly and without incident.
Customer satisfaction is at the heart of everything we do. Our dedicated support team is always ready to assist you with any questions or concerns you may have about DSC registration. We’re here to ensure that you feel confident and supported throughout the process.
Mandatory Compliances for Private Limited Company
- Statutory Audit Compliance: Preparing and releasing yearly economic information of the company including balance sheet, profit and loss account, cash flow statement, and statement of change in ownership. These have to be checked by a trained inspector who will release an audit file with the financial statements.
- Yearly ROC Filing: It is mandatory to file yearly returns (MGT-7) and economic statements (AOC-4) with the Registrar of Companies (ROC) within 30 days from the date of the Annual General Meeting (AGM).
- Auditor Appointment: Appointing an auditor for five years or until the end of the next AGM. The name of the authorized inspector is required and can’t be taken as part of annual compliance.
- Annual General Meeting (AGM): Holding an AGM within six months from the end of the financial year, with a gap of not more than 15 months between 2 straight AGMs.
- Board Meeting: Conducting at least four board conferences in a year, with a gap of not more than 120 days between two conference meetings.
- Director Report: Submitting a director report for each economic year to the Ministry of Corporate Affairs (MCA) as a report for the MGT-7 form.
- Income Tax Compliance: Filing income tax returns (ITR) for the financial year by the due date, October 31 of the next economic year.
- Other Events Based Compliance: Filing paperwork for modifications in administrators, capital structure, return of allotment, creation and amendment of charge, appointment of statutory auditor, removal of statutory auditor, shifting of registration office, and return of deposits with the business enterprise.
- Updating Statutory Registers and Records: Managing statutory registers and information, which include the register of directors, members, allotment, share transfer, split of shares, related party transactions, and share certificate.
- Renew and Update All Agreements, Contracts, Licenses, and others: It is mandatory for all businesses to renew and revise contracts, agreements, and licenses (if they exist).
- Consequences of Non-Compliance: Failure to meet the statutory compliances has dire consequences and perpetual failure to meet annual compliance requirements can lead to the removal of the name of the company from the ROC
- Mandatory Compliances: AOC-4 & MGT-7- ROC Filings, ADT-1 – Auditors Appointment, DIR-3—Filing of Directors KYC, MBP-1—Notice of Interest by Director, DIR-8—Intimation by Director, Financials preparation (B/S, P/L etc.), Statutory Audit, Filing of Income tax Return, Annual Report & Director’s Report, Return on Foreign assets & liabilities.
- Statutory Registers & Minutes: Minimum Four Board Meetings, Hold an Extra General Meeting (EGM), Annual General Meeting (AGM), and Operational Day-to-Day Compliances.
- Event-Based Compliances: DIR-12 for Change in Directors, SH-7 for Change in capital structure, MGT-14, PAS-3 for Return of Allotment, CHG-1 for Creation and modification of Charge, ADT-1 for Appointment of Statutory Auditor, ADT-3 for Resignation of Statutory Auditor, INC-22 for Shifting of Registered Office without Change in the jurisdiction of ROC, INC-23, INC-28, MGT-14, INC-22 for Shifting of Registered Office with Change in the Jurisdiction of ROC, Form MSME for Return for the delay in payments to MSMEs, DPT-3 for Return of Deposits with the Company, MGT-14 for Filing of Resolutions & Agreements with ROC, AOC-5 for Additional place other than the registered office where books of accounts and statutory registers are being kept, BEN-2 for Disclosure of Substantial Beneficial Ownership (SBO), and DIR-9 (in case company fails to file the financial statements, annual returns, deposits, interest dividends etc.).
Annual Compliance Checklist for Private Company
The plan for annual compliance of private limited companies includes:
- Appointment of Auditors: Ensure auditors are picked within 30 days of creation and their yearly reappointment.
- Holding of AGMs: Conduct AGMs within 18 months of creation and quarterly thereafter.
- Filing of every year’s Returns and Financial Statements: Submit every year’s returns and monetary statements to the ROC within 60 days of the AGM.
- Compliance with Tax Regulations: File income tax returns and stick to tax regulations.
- Maintenance of Statutory Registers and Records: Keep correct statistics of statutory registers, financial accounts, and minutes of conferences to ensure compliance with legal requirements.
Benefits of Filing Annual Compliance for Private Limited Company
Compliance with annual compliances for private limited businesses gives several perks, including:
- Maintain Legal Status and Avoid Fines: Compliance with annual compliances guarantees that a private limited company continues its legal status and avoids fines, legal problems, and damage to its reputation. Failure to satisfy annual compliance requirements can result in heavy fines, court action, and the company’s name being struck off the ROC record.
- Ensure openness and Accountability to Stakeholders: Compliance with annual compliances ensures openness and accountability to stakeholders, along with owners, employees, customers, and officials. It gives partners an accurate and up-to-date understanding of the corporation’s economic success, management, and compliance state.
- Compliance with Laws and Regulations: Compliance with annual compliances guarantees that a private limited agency meets with vital laws and rules, along with the Companies Act 2013, the Income Tax Act 1961, and distinctive, relevant laws. It helps the organization stay away from legal obligations and maintain its legal status.
Requirements for Annual Compliance Filing
To meet annual compliance requirements, private limited companies must stick to specific obligations:
- Appointment of Accountants: Private limited companies must appoint accountants within 30 days of creation and repeat their appointment yearly to ensure accurate financial reporting and compliance with auditing standards.
- Holding of Annual General Meetings (AGMs): AGMs must be held within 18 months of formation and later at least once every year, with no more than a 15-month gap between two straight meetings. AGMs provide a stage for owners to talk about business problems and pass financial records.
- Filing of Annual Returns and Financial Statements: Private limited companies are predicted to file annual returns and economic statements with the ROC before 60 days of the AGM. These papers provide a structure of the business’s financial health and compliance state.
- Compliance with Tax Regulations: Private limited companies in India have to comply with tax regulations by filing income tax returns on time and sticking to tax responsibilities to remain compliant with tax laws.
Documents Required for Filing Annual Compliance for Private Limited Company
Annual compliance for private limited businesses needs the filing of specific papers with the Registrar of Companies (ROC) and other agencies. These papers include accepted financial reports, yearly return forms, tax returns, and board decisions.
- Audited Financial Statements: These statements provide a whole image of an organization’s financial achievement, such as the balance sheet, profit and loss account, and cash flow report. They must be made yearly and checked by an experienced inspector to make sure they are clear and agree with economic standards.
- Board Resolutions: Board resolutions record key choices made by the board of directors, such as clearing financial accounts, picking lawyers, and giving awards. These choices are crucial for showing compliance with law requirements and government standards.
- Annual Return Forms: Annual return forms, like MGT-7 and AOC-4, are filed with the Registrar of Companies (ROC) to offer details about the firm’s financial function and compliance state. They include statistics on companies, leaders, and economic achievement.
- Tax Returns: Filing tax returns are required for companies to record their income, fees, and tax payments. Failure to report tax forms or delays can lead to fines and interest in payments. It is vital for corporations to comply with tax legal guidelines to keep away from legal consequences and maintain economic openness.
Process of Annual Compliance Filing for Private Limited Company
- Role of auditors: Appoint an auditor within 30 days of establishment and ensure their role is renewed every year. The auditor is known for checking the corporation’s monetary information and ensuring compliance with accounting standards.
- Holding of AGMs: Hold an AGM within 18 months of creation and, after that, at least 1 in 12 months, with a break not greater than 15 months among 2 AGMs. The AGM is a chance for proprietors to talk about the corporation’s economic progress, approve economic records, and make key choices.
- Filing of annual returns and financial statements: File annual returns and economic statements with the ROC within 60 days of the AGM. The annual return provides information about the company’s monetary activities and compliance status, while the financial details provide an overview of the corporation’s economic stability.
- Compliance with tax regulations: File income tax returns and meet with other tax regulations. Private limited companies are needed to make income tax reports and comply with other tax rules to ensure compliance with tax laws.
- Maintenance of regulatory files and records: Maintain correct and up-to-date records of all business actions and processes. This includes keeping formal records, financial accounts, and minutes of meetings to ensure compliance with legal requirements.
Penalties for Non-Compliance
When companies in India do not have post-incorporation obligations under the Companies Act 2013, they can face the mentioned range of penalties:
- Missing Board Meetings: If a company does not hold Board meetings at least once every three months, a fine of ₹1 lakh can be imposed on the Company, plus an extra fine of ₹5,000 is also imposed for each day it continues to miss meetings.
- Not Holding Annual General Meetings (AGM): Companies that don’t hold AGMs the end of financial year, then it could face fines of up to ₹1 lakh, along with ₹5,000 for each day delay.
- Not Filing Financial Statements (Form AOC-4): Companies can be fined ₹1 lakh for not filing their financial statements within 30 days of filing the Annual General Meeting, plus ₹5,000 for each for late filing. Even the Directors can also face penalties of up to ₹25,000.
- Neglecting Statutory Registers: Companies failing to maintain required statutory registers can face fines of ₹25,000, with an additional ₹1,000 for each day of non-compliance.
- Failure to Disclose Director’s Interest (Form MBP-1): If directors don’t disclose their interests, they could be fined between ₹50,000 and ₹1,00,000.
- Not Paying Annual Fees to the Registrar: Companies can be fined with penalties ranging from ₹1,000 up to ₹10,000, with extra charges for delay in filing the annual fees to the Registrar.
- Non-Compliance with E-Voting Requirements: Companies that skip e-voting obligations can have penalties ranging from ₹1 lakh, plus ₹5,000 for each day they make non-compliance.
- Failure to File Other Forms (e.g., INC-22, DIR-12): Companies have to file the DIR-12 form within 30 days of the appointment or resignation of the Director and INC-22 within 30 days of a change in the registered office of the company. Failure to file these forms can result in fines of ₹1 lakh, plus ₹5,000 for each day of delay.
- Not Maintaining a Registered Office: Every company in India is required to have a registered office that is the official address of the company. If a company fails to maintain its registered office, it faces a fine of ₹1,000 for each day it remains non-compliant. However, the total fine cannot exceed ₹1 lakh, i.e., even after the calculation, if the fine exceeds ₹1 lakh, then the Company shall be fined with ₹1 lakh only.
Why Choose Audit Needs?
Audit Needs is a known provider of business compliance services, giving expert help and assistance for yearly compliances of private limited companies. With a focus on improving the compliance process, Audit Needs provides full solutions that help businesses maintain legal compliance and avoid fines.
Audit Needs knowledge goes to giving monthly reports on law changes and compliance requirements, ensuring that businesses stay aware and up-to-date with the latest requirements. The company’s focused support team is dedicated to helping businesses keep compliance and avoid legal risks, giving a reliable partner for businesses seeking quick and effective compliance solutions.
In addition to its compliance services, Audit Needs also gives expert advice on the benefits and downsides of different business types, including private limited companies, single proprietorships, and business partnerships. This complete approach to business services makes Audit Needs a useful partner for companies wanting full help for their legal and regulatory needs.
Expert Guidance on Compliance for Private Limited Companies
Navigating compliance can be a complex challenge for private limited companies in India. Adhering to the comprehensive requirements of the Companies Act 2013, including director appointments, shareholder meetings, and other regulatory obligations, is crucial but can often seem overwhelming.
That’s where Audit Needs steps in. We provide expert guidance and comprehensive solutions tailored to your company’s needs, simplifying the compliance process from registration to ongoing obligations. Our team of specialists is equipped with in-depth knowledge of Indian business laws and regulations, ensuring your company meets company compliance requirements. Whether you are a startup or an established enterprise, Audit Needs is your partner in simplifying compliance.
Let’s make Company compliance hassle-free together! Get Started now!
Compliance for Private Limited Company
Compliance refers to adhering to orders, rules, or requests. For a private limited company incorporated in India, Compliance with the Companies Act 2013, which includes obligations to the Registrar of Companies (RoC), is essential for private limited companies in India. This legislation governs various aspects, including the appointment, qualification, remuneration, and retirement of directors and the conduct of board and shareholder meetings. Compliance with Registrar of Companies (RoC) regulations is mandatory for every private limited company, regardless of turnover or capital amount.
- Compliance Related to the Registrar – ROC Complaince
- Compliance Beyond the Registrar’s Purview – Non-Registrar compliance
ROC Compliance for Private Limited Company
As mentioned above, These are obligations that a company must fulfil in accordance with the regulations set by the Registrar of Companies (ROC) or equivalent authority. They typically involve statutory filings and adherence to the Companies Act provisions.
Ensuring adherence to ROC compliance is pivotal for companies operating in India. ROC Compliance for Private limited company can be broadly classified into:
- Annual Compliance: These are the regular, yearly filings and disclosures companies must make, including submitting annual returns and financial statements.
- Event-Based Compliance: These are specific compliances that need to be addressed as and when certain events occur within the company, such as changes in the company’s management, share capital, or registered office.
- Other Compliances: This category includes a range of other regulatory obligations that might not fall strictly under annual or event-based categories but are essential for maintaining the company’s legal status, such as director KYC updates and maintenance of statutory registers.
Annual Compliances for Private Limited Company
Annual compliances are a critical aspect of corporate governance for companies registered in India. Key annual compliances include:
INC-20A: Declaration for Commencement of Business
For companies registered in India post-November 2019 with a share capital, securing a Commencement of Business Certificate is a prerequisite before initiating any business activities or exercising borrowing powers. This certificate must be acquired within 180 days of incorporation by filing Form INC-20A.
Failure to obtain this certificate results in penalties, with the company facing a fine of Rs. 50,000 and directors being charged Rs. 1,000 per day for each non-compliance, underscoring the importance of promptly adhering to this regulatory requirement.
Appointment of Auditor and Filing E-form ADT-1
The first auditor must be appointed within 30 days of incorporation and ratified by the shareholders during the first Annual General Meeting (AGM). Following the AGM, Form ADT-1 confirming the auditor’s appointment must be filed with the Registrar of Companies (ROC) within 15 days.
Board Meetings
The first board meeting should be held within 30 days of incorporation. Subsequently, companies must hold at least four board meetings every year, ensuring that the interval between two meetings is at most 120 days.
Further, the discussion in the meeting needs to be drafted and recorded in the minutes and maintained at the company’s registered office.
A notice should be given seven days in advance about the meeting’s date and purpose.
Annual General Meeting (AGM)
The first AGM should be conducted within nine months from the closure of the first financial year. For subsequent years, the AGM must be held every year within six months from the end of the financial year, ensuring that the gap between two AGMs is at most 15 months.
AGMs are held for approval of financial statements, declaration of dividends, appointment or re-appointment of auditors, commission, remuneration of directors, etc.
The meeting is held during business hours on a day that is not a public holiday. It shall occur at the company’s registration or the city, village, or town in which the registered office is situated.
Annual ROC Filings
Private Limited Companies must file annual accounts and returns to the companies’ registrar, disclosing the details of their shareholders, directors, etc.
As a part of the annual compliance for private limited company, the following forms are to be filed with the ROC:
AOC-4: Filing of Financial Statements
This form is for filing the company’s financial statements and must be submitted within 30 days following the Annual General Meeting (AGM).
MGT-7 – Annual Returns
Form MGT-7 (Annual returns) must be filed within 60 days of the annual general meeting
DIR-12: Appointment/Resignation of Directors
This form pertains to changes in the company’s directorship, including appointments and resignations, and must be filed within 30 days of such changes.
DIR-3 KYC: Director KYC Submission
Directors are required to submit their KYC details through Form DIR-3 by September 30th each year, provided their Director Identification Number (DIN) was allotted by March 31st of that year and the status is ‘Approved’. Failure to file DIN eKYC results in a penalty of Rs. 5000.
DPT-3: Return of Deposits
Companies must use this form to report details of deposits and other non-deposit receipts annually by June 30th.
Directors’ Report
An abridged version covering all required information for small companies under Section 134 must be prepared. It should be authorized by the Chairperson or at least two directors.
Maintenance of Statutory Registers and Books of Accounts
Companies must maintain and regularly update various statutory registers and records, including minutes of board meetings and AGMs, books of accounts, financial statements, and files with the ROC.
Circulation of Financial Statements and Other Relevant Documents
Companies must send approved financial statements, along with the Directors’ and Auditors’ reports, to all members at least 21 clear days before the AGM.
For ready reference, below is a table summarizing the annual compliances for private limited company and their respective due dates:
| Annual compliances for Private Limited Company | Due Date |
|---|---|
| Commencement of Business Certificate (COB) | Within 180 days of incorporation |
| Appointment of Auditor and Filing E-form ADT-1 | Within 15 days of the AGM |
| Holding Board Meetings | As per the schedule of board meetings |
| Conducting the Annual General Meeting (AGM) | Within 9 months from financial year-end |
| INC-20A: Declaration for Commencement of Business | Within 180 days of incorporation |
| AOC-4: Filing of Financial Statements | Within 30 days of the AGM |
| MGT-7A: Annual Returns for Small Companies/OPCs | Within 60 days of the AGM |
| DIR-12: Appointment/Resignation of Directors | Within 30 days of appointment/resignation |
| DIR-3 KYC: Director KYC Submission | By September 30th each year |
| MGT-14: Filing of Board Resolutions | Within 30 days of passing the resolution |
| DPT-3: Return of Deposits | By June 30th each year |
| Directors’ Report | At least 21 days before the AGM |
| Maintenance of Statutory Registers and Books of Accounts | Throughout the financial year |
| Circulation of Financial Statements and Other Relevant Documents | At least 21 days before the AGM |
Event-Based Compliances for Private Limited Company
Besides the annual filings, there are various other compliances that need to be compiled with on occurrence of any event in the company.
Here are specific instances of such events:
- Change in the authorized capital or the paid-up capital of the company.
- Allotment of new shares or transfer new shares
- giving loans to other companies
- giving loans to directors
- Appointment of managing or whole-time Director and their payment
- when a bank account is opened or closed, or there is a change in the signatories of a bank account.
- if there is an appointment or change of the statutory auditors of the company
It is necessary to file different forms with the registrar for all such events within a specific period. In case of missing out on this, additional fees or penalties might be levied. Hence, it is necessary to meet such compliances on time.
Non-Registrar compliance
These regulatory obligations do not directly involve the ROC but are essential for lawful business operations. They may be governed by various other regulatory bodies and laws, depending on the nature of the business, its size, and the industry it operates in. These include:
- Payment of Periodic Tax Due: Regular payment of Goods and Services Tax (GST) liability, Tax Deducted at Source (TDS), Tax Collected at Source (TCS), Advance Tax, and Professional Tax (PTax).
- Filing of Periodic Returns:
- Monthly/Quarterly/Annual GST Returns
- Quarterly TDS Returns
- Filing of Income Tax Returns
- Filing of Tax Audit Report
- Filing of half-yearly Employees’ State Insurance Corporation (ESIC) returns
- Filing of Provident Fund (PF) returns
- Filing of professional tax (PTax) returns
- Regulatory Assessment and Reporting: Compliance with various regulatory assessments and reporting requirements under different acts of law, such as the Environment Protection Act, Competition Act, and Factory Act.
Non-compliance Penalty
Non-compliance with the rules and regulations of the Companies Act in India can result in penalties for the company and its defaulting members. Penalties typically involve fines imposed for the duration of the non-compliance. Additionally, delays in annual filings may incur additional fees. Therefore, companies should fulfil their compliance obligations promptly to avoid penalties and financial repercussions.
Streamline Company Compliance with Audit Needs
With Audit Needs, entrepreneurs can seamlessly complete their company compliance requirements. Here’s how we can help:
LEDGERS Compliance Platform
We offer access to the LEDGERS compliance platform, which is designed to streamline compliance tasks. Entrepreneurs can use this platform to manage their compliance obligations efficiently, track deadlines, generate reports, etc.
Dedicated Advisor
Your company will be assigned a dedicated Compliance Manager who will be a single point of contact to help you maintain the compliance for your company. You can get in touch with your Compliance Manager at anytime and get assistance on matters related to your Company’s compliance.
Accounting
All companies are required to maintain accounts and prepare financial statements at the end of each financial year. Our Compliance Manager will help your company maintain accounts and will prepare the financial statement for your business at the end of financial year.
Secretarial Services
Companies are required to conduct a minimum of four board meetings, an annual general meeting, Directors Report and Annual Report each financial year. Our Compliance Manager will help you prepare minutes of board meetings and create all secretarial reports.
MCA Annual Return Filing
Annual General Meeting should be held by a company within 6 months from the end of that financial year. And MCA annual return must be filed on or before September 30th. Our Compliance Manager will prepare all the documents and file your company’s MCA annual return.
Income Tax Return Filing
Income tax return of a company must be filed irrespective of income, profit or loss. Hence, even dormant companies with no transactions are required to file income tax return each year. Our Compliance Manager will prepare all the documents and file your company’s income tax return.
Ready to streamline compliance effortlessly? Let Audit Needs be your trusted partner. Get started today and experience hassle-free compliance management.
Renewal of DSC (Digital Signature Certificate)
Digital Signature Certificates (DSCs) are not valid for a lifetime; It is valid for a specific period, mostly one or two years, after which they need to be renewed to maintain their legal validity. Failure to update your DSC on time may lead to problems with online files, deals, and legal compliance and the renewal process of a DSC is a straightforward process and involves verifying the identity of the certificate holder. To renew your DSC, you need to submit the necessary documents and follow the guidelines set by the Certifying Authority that issued your original certificate.
By constantly renewing your DSC, you can maintain a smooth digital process and support the security and validity of your online contacts. At Audit Needs, we provide assistance with the renewal process, taking you through the necessary steps to ensure your DSC stays valid and up-to-date for continued use in your online activities.
Why Choose Audit Needs?
With over 50,000 satisfied clients, Audit Needs has earned a reputation as one of the most trusted names for Digital Signature Certificate (DSC) services. Our team of experts are here to help you in the following ways?
- Expert Guidance: Our experts shall assist you throughout the DSC application process. Whether you are a young entrepreneur looking for a new DSC or an existing user looking to renew your certificate, we ensure you that you understand everything in the filing process and avoid any unnecessary complications.
- Simple and Fast Process: We understand the importance of your time. For this reason, our team has broken the process down into manageable steps for you. Our efficient approach guarantees that you won’t be kept waiting or snagged on pointless paperwork.
- Affordable Pricing: We believe that obtaining your DSC should not be expensive. For DSC registration, Audit Needs provides reasonable prices that offer great value without sacrificing product or service quality.
- Committed Customer Service: At Audit Needs, we prioritize our customers. Our customer service representatives are here to assist you with your questions and concerns around the clock. Our goal is to ensure that the procedure goes smoothly and without incident.
Customer satisfaction is at the heart of everything we do. Our dedicated support team is always ready to assist you with any questions or concerns you may have about DSC registration. We’re here to ensure that you feel confident and supported throughout the process.
Mandatory Compliances for Private Limited Company
- Statutory Audit Compliance: Preparing and releasing yearly economic information of the company including balance sheet, profit and loss account, cash flow statement, and statement of change in ownership. These have to be checked by a trained inspector who will release an audit file with the financial statements.
- Yearly ROC Filing: It is mandatory to file yearly returns (MGT-7) and economic statements (AOC-4) with the Registrar of Companies (ROC) within 30 days from the date of the Annual General Meeting (AGM).
- Auditor Appointment: Appointing an auditor for five years or until the end of the next AGM. The name of the authorized inspector is required and can’t be taken as part of annual compliance.
- Annual General Meeting (AGM): Holding an AGM within six months from the end of the financial year, with a gap of not more than 15 months between 2 straight AGMs.
- Board Meeting: Conducting at least four board conferences in a year, with a gap of not more than 120 days between two conference meetings.
- Director Report: Submitting a director report for each economic year to the Ministry of Corporate Affairs (MCA) as a report for the MGT-7 form.
- Income Tax Compliance: Filing income tax returns (ITR) for the financial year by the due date, October 31 of the next economic year.
- Other Events Based Compliance: Filing paperwork for modifications in administrators, capital structure, return of allotment, creation and amendment of charge, appointment of statutory auditor, removal of statutory auditor, shifting of registration office, and return of deposits with the business enterprise.
- Updating Statutory Registers and Records: Managing statutory registers and information, which include the register of directors, members, allotment, share transfer, split of shares, related party transactions, and share certificate.
- Renew and Update All Agreements, Contracts, Licenses, and others: It is mandatory for all businesses to renew and revise contracts, agreements, and licenses (if they exist).
- Consequences of Non-Compliance: Failure to meet the statutory compliances has dire consequences and perpetual failure to meet annual compliance requirements can lead to the removal of the name of the company from the ROC
- Mandatory Compliances: AOC-4 & MGT-7- ROC Filings, ADT-1 – Auditors Appointment, DIR-3—Filing of Directors KYC, MBP-1—Notice of Interest by Director, DIR-8—Intimation by Director, Financials preparation (B/S, P/L etc.), Statutory Audit, Filing of Income tax Return, Annual Report & Director’s Report, Return on Foreign assets & liabilities.
- Statutory Registers & Minutes: Minimum Four Board Meetings, Hold an Extra General Meeting (EGM), Annual General Meeting (AGM), and Operational Day-to-Day Compliances.
- Event-Based Compliances: DIR-12 for Change in Directors, SH-7 for Change in capital structure, MGT-14, PAS-3 for Return of Allotment, CHG-1 for Creation and modification of Charge, ADT-1 for Appointment of Statutory Auditor, ADT-3 for Resignation of Statutory Auditor, INC-22 for Shifting of Registered Office without Change in the jurisdiction of ROC, INC-23, INC-28, MGT-14, INC-22 for Shifting of Registered Office with Change in the Jurisdiction of ROC, Form MSME for Return for the delay in payments to MSMEs, DPT-3 for Return of Deposits with the Company, MGT-14 for Filing of Resolutions & Agreements with ROC, AOC-5 for Additional place other than the registered office where books of accounts and statutory registers are being kept, BEN-2 for Disclosure of Substantial Beneficial Ownership (SBO), and DIR-9 (in case company fails to file the financial statements, annual returns, deposits, interest dividends etc.).
Annual Compliance Checklist for Private Company
The plan for annual compliance of private limited companies includes:
- Appointment of Auditors: Ensure auditors are picked within 30 days of creation and their yearly reappointment.
- Holding of AGMs: Conduct AGMs within 18 months of creation and quarterly thereafter.
- Filing of every year’s Returns and Financial Statements: Submit every year’s returns and monetary statements to the ROC within 60 days of the AGM.
- Compliance with Tax Regulations: File income tax returns and stick to tax regulations.
- Maintenance of Statutory Registers and Records: Keep correct statistics of statutory registers, financial accounts, and minutes of conferences to ensure compliance with legal requirements.
Benefits of Filing Annual Compliance for Private Limited Company
Compliance with annual compliances for private limited businesses gives several perks, including:
- Maintain Legal Status and Avoid Fines: Compliance with annual compliances guarantees that a private limited company continues its legal status and avoids fines, legal problems, and damage to its reputation. Failure to satisfy annual compliance requirements can result in heavy fines, court action, and the company’s name being struck off the ROC record.
- Ensure openness and Accountability to Stakeholders: Compliance with annual compliances ensures openness and accountability to stakeholders, along with owners, employees, customers, and officials. It gives partners an accurate and up-to-date understanding of the corporation’s economic success, management, and compliance state.
- Compliance with Laws and Regulations: Compliance with annual compliances guarantees that a private limited agency meets with vital laws and rules, along with the Companies Act 2013, the Income Tax Act 1961, and distinctive, relevant laws. It helps the organization stay away from legal obligations and maintain its legal status.
Requirements for Annual Compliance Filing
To meet annual compliance requirements, private limited companies must stick to specific obligations:
- Appointment of Accountants: Private limited companies must appoint accountants within 30 days of creation and repeat their appointment yearly to ensure accurate financial reporting and compliance with auditing standards.
- Holding of Annual General Meetings (AGMs): AGMs must be held within 18 months of formation and later at least once every year, with no more than a 15-month gap between two straight meetings. AGMs provide a stage for owners to talk about business problems and pass financial records.
- Filing of Annual Returns and Financial Statements: Private limited companies are predicted to file annual returns and economic statements with the ROC before 60 days of the AGM. These papers provide a structure of the business’s financial health and compliance state.
- Compliance with Tax Regulations: Private limited companies in India have to comply with tax regulations by filing income tax returns on time and sticking to tax responsibilities to remain compliant with tax laws.
Documents Required for Filing Annual Compliance for Private Limited Company
Annual compliance for private limited businesses needs the filing of specific papers with the Registrar of Companies (ROC) and other agencies. These papers include accepted financial reports, yearly return forms, tax returns, and board decisions.
- Audited Financial Statements: These statements provide a whole image of an organization’s financial achievement, such as the balance sheet, profit and loss account, and cash flow report. They must be made yearly and checked by an experienced inspector to make sure they are clear and agree with economic standards.
- Board Resolutions: Board resolutions record key choices made by the board of directors, such as clearing financial accounts, picking lawyers, and giving awards. These choices are crucial for showing compliance with law requirements and government standards.
- Annual Return Forms: Annual return forms, like MGT-7 and AOC-4, are filed with the Registrar of Companies (ROC) to offer details about the firm’s financial function and compliance state. They include statistics on companies, leaders, and economic achievement.
- Tax Returns: Filing tax returns are required for companies to record their income, fees, and tax payments. Failure to report tax forms or delays can lead to fines and interest in payments. It is vital for corporations to comply with tax legal guidelines to keep away from legal consequences and maintain economic openness.
Process of Annual Compliance Filing for Private Limited Company
- Role of auditors: Appoint an auditor within 30 days of establishment and ensure their role is renewed every year. The auditor is known for checking the corporation’s monetary information and ensuring compliance with accounting standards.
- Holding of AGMs: Hold an AGM within 18 months of creation and, after that, at least 1 in 12 months, with a break not greater than 15 months among 2 AGMs. The AGM is a chance for proprietors to talk about the corporation’s economic progress, approve economic records, and make key choices.
- Filing of annual returns and financial statements: File annual returns and economic statements with the ROC within 60 days of the AGM. The annual return provides information about the company’s monetary activities and compliance status, while the financial details provide an overview of the corporation’s economic stability.
- Compliance with tax regulations: File income tax returns and meet with other tax regulations. Private limited companies are needed to make income tax reports and comply with other tax rules to ensure compliance with tax laws.
- Maintenance of regulatory files and records: Maintain correct and up-to-date records of all business actions and processes. This includes keeping formal records, financial accounts, and minutes of meetings to ensure compliance with legal requirements.
Penalties for Non-Compliance
When companies in India do not have post-incorporation obligations under the Companies Act 2013, they can face the mentioned range of penalties:
- Missing Board Meetings: If a company does not hold Board meetings at least once every three months, a fine of ₹1 lakh can be imposed on the Company, plus an extra fine of ₹5,000 is also imposed for each day it continues to miss meetings.
- Not Holding Annual General Meetings (AGM): Companies that don’t hold AGMs the end of financial year, then it could face fines of up to ₹1 lakh, along with ₹5,000 for each day delay.
- Not Filing Financial Statements (Form AOC-4): Companies can be fined ₹1 lakh for not filing their financial statements within 30 days of filing the Annual General Meeting, plus ₹5,000 for each for late filing. Even the Directors can also face penalties of up to ₹25,000.
- Neglecting Statutory Registers: Companies failing to maintain required statutory registers can face fines of ₹25,000, with an additional ₹1,000 for each day of non-compliance.
- Failure to Disclose Director’s Interest (Form MBP-1): If directors don’t disclose their interests, they could be fined between ₹50,000 and ₹1,00,000.
- Not Paying Annual Fees to the Registrar: Companies can be fined with penalties ranging from ₹1,000 up to ₹10,000, with extra charges for delay in filing the annual fees to the Registrar.
- Non-Compliance with E-Voting Requirements: Companies that skip e-voting obligations can have penalties ranging from ₹1 lakh, plus ₹5,000 for each day they make non-compliance.
- Failure to File Other Forms (e.g., INC-22, DIR-12): Companies have to file the DIR-12 form within 30 days of the appointment or resignation of the Director and INC-22 within 30 days of a change in the registered office of the company. Failure to file these forms can result in fines of ₹1 lakh, plus ₹5,000 for each day of delay.
- Not Maintaining a Registered Office: Every company in India is required to have a registered office that is the official address of the company. If a company fails to maintain its registered office, it faces a fine of ₹1,000 for each day it remains non-compliant. However, the total fine cannot exceed ₹1 lakh, i.e., even after the calculation, if the fine exceeds ₹1 lakh, then the Company shall be fined with ₹1 lakh only.
Why Choose Audit Needs?
Audit Needs is a known provider of business compliance services, giving expert help and assistance for yearly compliances of private limited companies. With a focus on improving the compliance process, Audit Needs provides full solutions that help businesses maintain legal compliance and avoid fines.
Audit Needs knowledge goes to giving monthly reports on law changes and compliance requirements, ensuring that businesses stay aware and up-to-date with the latest requirements. The company’s focused support team is dedicated to helping businesses keep compliance and avoid legal risks, giving a reliable partner for businesses seeking quick and effective compliance solutions.
In addition to its compliance services, Audit Needs also gives expert advice on the benefits and downsides of different business types, including private limited companies, single proprietorships, and business partnerships. This complete approach to business services makes Audit Needs a useful partner for companies wanting full help for their legal and regulatory needs.