There are numerous rules and regulations that a business has to follow to keep running smoothly. And failing to keep up with these rules and regulations will lead to legal liability.

If you’ve established your firm as a private limited company, there are several annual compliance for private limited company that are mandatory for you. Being non-compliant with these rules will lead to penalties and may also bring closure to business in extreme cases.

This blog aims to simplify the business compliance process for you and provides detailed information about the Annual Compliance For Private Limited Company In India.

Annual Compliances For Private Limited Company In India

There are two types of compliances:

1. Mandatory compliances (Registrar related Compliance)
2. Event-based compliances (Non-Registrar compliance)

First-time entrepreneurs are generally unaware of the startup compliances they have to keep up with once their company incorporation process gets completed. And, those who are aware of the process know the intricacies revolving around the compliance filing process.

So, to provide entrepreneurs with information on Annual Compliance For Private Limited Company, TheStartuplab has created a checklist that is applicable for private limited companies. The checklist is particularly for Small Companies with paid-up capital of up to Rs. 50 Lakh or companies having annual turnover in last year below Rs. 2Cr.

1. Appointment of Auditor (E-form ADT-1)

Every company has to appoint a First Statutory Auditor within 30 days of incorporation in the first board meeting. Note that subsequent auditors will be appointed for five years in AGM.

Also, Form ADT-1 is filed for a 5-year appointment. Following that every year in AGM, shareholders approve the Auditor, but there is no need to file ADT-1.

2. Board Meeting

The company has to do the first board meeting within 30 days of incorporation. Additionally, the gap between two board meetings of a company must not exceed 120 days, and it should conduct a minimum of four board meetings in a year.

Note: Due to COVID-19, the MCA has extended the period of interval between two board meetings by an additional 60 days.

3. Annual General Meeting (AGM)

One Annual General Meeting is required to be held by the company, and there can only be a maximum gap of 15 months between 2 AGMs.

4. E- Forms Filing Requirements

There are several forms the company needs to file to complete the registrar related compliance process. The list of forms is as follows

• E-form: MGT-7
• E-form: AOC-4
• Form MBP- 1
• Form DIR – 8

E-form: MGT-7

This electronic form is allocated to all the companies by the Ministry of Corporate Affairs (MCA) for filing details of their annual return. Every company has to file the annual return within 60 days of holding of Annual General Meeting for the period 1st April to 31st March.

E-form: AOC-4

It is mandatory for every company name registration under the Companies Act, 2013 of the Companies Act, 1956, to file Form AOC 4 and MGT 7.

As MGT-7 is for filing details of their annual return, e-Form AOC-4 is used to file the Financial Statements of the company along with the Director’s Report.

Form MBP- 1

Every Director of the Company, in the first meeting of the Board of Directors in each financial year, needs to disclose his concern or interest in any company or companies, firms or other association of individuals by filing the Form MBP 1.

Additionally, whenever there is a change in Directors’ interest from the earlier given MBP-1, a fresh form MBP-1 needs to be filed.

Form DIR – 8

As per the Companies Act, 2013, every director of the Company shall inform the company concerned about his disqualification under sub-section (2) of section 164, if any, in Form DIR-8 before he is appointed or re-appointed.

This form is for the intimation by the director of disqualification or non-disqualification and also an intimation of companies in which he was a director in the last three years.

Directors’ Report

It is a financial disclosure made by the director to the shareholders of the company. Directors’ Report shows the financial status of the company by disclosing the company’s operations and range of work along with its subsidiaries.

Statutory registers and books of accounts

As per the Companies Act, 2013, companies are required to provide certain records and register before ROC (registrar of companies) within specific time limits. These includes

1. Statutory Registers

• Register of the Company and members
• Register of Directors and Key Managerial Personnel
• Register of Charges
• Register of Renewed and Duplicate Share Certificates
• Register of Employee Stock Options
• Register of Shares/Other Securities Bought Back

2. Minutes Book

• Board Meeting Minutes Book
• General Meeting Minutes Book

3. Books of Accounts/Financial Statements (section 44aa)

4. Register of Directors Attendance at Board/Committee Meetings.

Circulation of Financial Statement & other relevant Docs

Before the Annual General Meeting, companies have to send each of its members, every trustee for the debenture-holder of any debentures issued by the company, and all persons that are entitled to receive, approved Financial Statement, Auditor’s Report and Directors’ Report at least 21 clear days.

Non-Registrar Compliance

• GST Returns (Monthly/Quarterly )
• TDS Returns (Quarterly)
• Periodic evaluation of advance tax liability and payment of advance tax
• Filing of Tax Audit Report
• Filing of Income Tax Returns (ITR)
• Regulatory Check of business under different acts of law (E.g. Money Laundering Act, Competition Act, Environment and Protection Act, Factory Act etc.)

For further details, you can visit here.

Note: As the compliance filing process is intricate, several businesses might find it hard to meet the compliance requirements. Non-adherence to these compliances lead to penalties which no company would want to risk.

So, it is advisable to go with professional guidance to complete the compliance filing process.

Contact us to complete the compliance filing process on time and without any hassle.