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Annual Compliance of a Pvt. Ltd. Company

Enjoy a separate personality, controlling its active status through the regular filing with MCA. Blend in business ethics for Private Limited Company Compliance with CorpBiz.

  • Assigning of a compliance Manager
  • Drafting of required documents
  • Preparation of form  needs to be filled
  • Online filing of financial statement and other documents
  • Online  filing of  annual return of company
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Overview of Annual Compliance for Private Company

A Private Company is a legal institute enjoying a separate personality which requires controlling its active status through the regular filing with MCA. For every business, it is compulsory to file an annual return and audited financial reports with MCA for every fiscal year. The RoC filing is necessary irrespective of the turnover, whether it is zero or in crore. Whether a single business is undertaken or none, annual compliances for private limited are compulsory for every certified company.

Both the forms are applied to report the activities and financial date for concerned Financial Year. The due terms for annual filing of a company are based on the time of the Annual General Meeting. The perpetual failure may lead to the elimination of the company’s name from RoC’s register, including incompetence of directors. Also, it has been noticed that MCA has actively taken bold measures for dealing with any such failures. The compliances relevant to the company could be segregated into two sections Mandatory Compliances and Event-Based Compliances.

Mandatory Annual Compliances

We have developed some of the mandatory agreements that a private Limited company must ensure:

  • First Board Meeting

    First Meeting of Board, along with Directors, is expected to be held within 30 days of Incorporation of Company. Declaration of BM must be sent to each director at least seven days ere the meeting.

  • Subsequent Board Meetings

    Minimum of 4 Board Meetings to be checked every year with not more than 120 days gap within two meetings.

  • Filing of Acknowledgement of interest by Directors

    Every director at:

    1. The first meeting in which he engages as director; or

    2. The first meeting of Board in each FY; or

    3. Whenever there is a variety in disclosures shall reveal in Form MBP 1 (along with a list of relatives and attention of relatives in the Company as per RPT definition), his interest or interest in any company, body corporate, organizers/firms or other organization of individuals (including shareholding interest). Form MBP‐1 shall be kept in the documents of the Company.

  • First Auditor

    the BOD shall designate the first Auditor of the Company within 30 days of Incorporation who shall continue the office till the completion of 1st AGM. In the matter of First Auditor, filing of ADT-1 is not necessary.

  • Subsequent Auditor

    The BOD shall delegate the Auditor Auditor in first AGM of Company who shall hold the position till the conclusion of 6th AGM and shall notify the same to ROC by filing ADT-1. The capacity to submit Form ADT 1 is that of the Company and not of the Auditor Auditor within 15 days from the time of appointment.

  • Annual General Meeting

    Every Company is needed to hold an Annual General Meeting on or before 30th September every year during working hours (9 am to 6 pm). On a day that is not a general public holiday and either at the certified office of the Company within the city, town/ village where the certified office is positioned. A 21 bright days' notice is required to be given for the same.

  • Filing of Annual Return (Form MGT-7)

    Each and every Private Limited Company is expected to file its Annual Return within 60 days of operating of Annual General Meeting. Annual Return will be for the time' 1st April to 31st March'.

  • Filing of Financial Statements in (Form AOC-4)

    Each and every private Limited Company is expected to file its 'Balance Sheet' along with a statement of 'Profit and Loss Account' and 'Director Report' in this Form in 30 days of holding of 'Annual General Meeting'.

  • Statutory Audit of Accounts

    Each and every Company should prepare its Accounts and get the exact audited by a Professionals/Chartered Accountant at the end of the Financial Year mandatorily. The Auditor should provide an Audit Report and the Audited Financial Statements to file it with the Registrar.

Event-Based Compliances

Even based compliances are those who get triggered upon following of certain events like change in directors, change of registered office, change in approved share capital etc. Hence, it is essential that the happening of such events get tracked, and docility met with on time to avoid penalties or additional fees. Some of the Event-based agreements are mentioned below, along with the time limit:

Actions

Form No.

Phase Limit

Change in registered office

INC-22

 

Within fifteen days from the date of such change

Change in Directors or KMP

 

DIR-12

 

Within 30 Days of such change

Increase in Authorized Share capital

 

SH-7

 

Within 30 days of passing Ordinary Resolution

Filing of resolution and agreements

 

MGT-14

 

Within 30 days from date of passing resolution

Increase in Paid up share capital (Issue of security)

PAS-3

Within fifteen days from the date of the allotment

Change in secured borrowing (Creation, modification and satisfaction of charge)

CHG-1

 

All types of Charges within 30 days of its creation

Application for KYC of Directors

 

DIR-3 KYC

 

On or before 30th April of immediate next Financial Year (Annual Compliance)

ACTIVE (Active Company Tagging Identities and Verification)

INC-22A

On or before 25th April 2019 (Applicable to all companies registered before 31st December 2017)

Declaration of Commencement of Business

INC-20A

 

Within a period of 180 days of the date of incorporation of the company. (Applicable to companies incorporated after 2nd November, 2018.)

Annual Compliance of a Pvt. Ltd. Company

Essentials

Form No.

Phase Limit

Change in Directors or KMP

DIR-12

Within 30 Days of such change

Increase in Authorized Share capital

SH-7

Within 30 days of passing OR

Increase in Paid up share capital (Issue of security)

PAS-3

Within fifteen days from the date of the allotment

Change in registered office

INC-22

Within fifteen days from the date of such change

Change in secured borrowing (Creation, modification and satisfaction of charge)

CHG-1

All types of Charges within 30 days of its creation

Change of name of company

INC-24

Within 60 days from the date of applying reservation of name in INC-1

Conversion of company

INC-27

Filing of resolution and agreements

MGT-14

Within 30 days from date of passing resolution

Removal of Auditor before Expiry

ADT-2

Within 30 days from date of passing SR

Application for KYC of Directors

DIR-3 KYC

On or before 30th April of immediate next Financial Year (Annual Compliance)

Report for Disqualification of the Director

DIR-9

To be filed by company within 30 days of such disqualification

Stipulations of Non-Compliances

If a company declines to follow any of the administrative compliances, then the Company and every officer who is in arrears shall be guilty with a fine for the period for which default remains. Hence the penalties will keep on escalating as the period of non-compliance increases.

Benefits of Annual Compliance

Benefits of Annual Compliance of Pvt
  • Establishing a Company’s Credibility

    Compliance of law is the fundamental requirement for any company—the date of the company’s annual return filing performed on the Master Data on the MCA portal. Ministry tenders, loan support or for similar other purposes, the consistency in compliance is an important criterion to measure the reliability of an organization.

  • Invite Investors

    While attracting funds for a corporation from the investors, the investors demand all financial histories and date before settling the proposal. The investors may either request the company directly or can also check the economic reports from the MCA portal. Investors also lead to favour companies with regular compliance reports.

  • Maintain Active State and Avoid Punishments

    Constant failure in filing the return turns the company status to failure and charges it with heavy penalties. The company may also be disclosed as defunct or removed from the RoC. The concerned directors are also excluded and debarred from their further appointment. Since July 2018, a supplementary fee of ₹100 for each day of delay has been levied till the date of filing.

Latest: Checklist of Annual Compliance for Private Startups

A startup working as a private limited company has to follow characters of compliance as laid down by different statutes and other administrative bodies. These include but are not restricted only to the periodic filing of tax and other returns, accommodating the board and other meetings, maintaining sanctioned books and accounts etc.

  • Payment of periodic dues: GST Liability, TDS & TCS mandatory payment
  • Non-Registrar compliance of periodic returns – (Monthly, quarterly, annual returns- GST, TDS, etc)
  • Monthly/Quarterly- GST Returns 
  • Quarterly-TDS Returns
  • Evaluation of advance tax liability and payment of advance tax periodically
  • Filing of Income Tax Returns (Tax will be obligatory at a flat rate of 30% plus Education Cess) 
  • Filing of Tax Audit Report 
  • Administrative Assessment of trade under different acts of law (Eg. Environment and Protection Act, Money Laundering Act, Competition Act, Factory Act etc.)

Documents Required for Annual Filing of Company

  • Incorporation Certificate

    1. PAN Card

    2. Certificate of Incorporation and

    3. MoA – AoA of Private Company

  • Audited Financial Statements
  • An independent auditor must audit financial Statements 
  • Audit Report & Board Report
  • Independent auditor’s report and Board report must be concerned
  • DSC of Director
  • Accurate and active DSC of one of the directors must be provided and presented

CorpBiz Procedure for Private Limited Company Annual Compliance & Filling

  • CorpBiz obtained your request for Private Limited Company compliance
  • We will assign a skilled resource who is professionally equiped in business compliance. The allotted resource support you to manage the compliance for your Private Limited Company. You can get in touch with the authorised resource at any point of time for deliberation and assistance concerning compliance throughout your journey with CorpBiz.
  • Our support will help your Private Limited Company to maintain statements and prepare the financial report for each year.
  • Our support will collect all the required documents/erudition and will complete all below designated compliance activities for your Private Limited Company.

    Manage Accounts and Make financial statements

    Annual returns

    Annual General Meeting

    Board meetings

    Director reports

    Annual Filing of Forms

    Yearly Forms by Directors

  • Our support will collect all the needed documents/information and file your Private Limited Company income tax return with ROC (Registrar of Companies) along with the necessary documents after getting final approval from your finance team if required.
  • Our support will help your Private Limited Company in accounts scrutiny.
  • Our support will draft minutes of meetings, announcements and will also manage the statutory register.
  • Preceding seven steps completes your Private Limited Company compliance under Companies Act 2013.

Summing-up

Running a business, particularly in the form of a private limited company, is not something to be engaged lightly. It requires both an ongoing expenditure of much time and effort, and important knowledge of many financial and administrative technicalities.

Compliance is a company asset that, if used in the correct way, can bring companies an aggressive advantage, customer trust and finally return on investment. The agreement is not only ‘doing the right thing’, or ‘ticking a box’ but it is the form of working, part of the business, investor confidence, understandable and open culture. Remember, the cost of non-compliance is always more than the cost of compliance. There are established and competent experts in the market today ready and willing to help you at every step of the business cycle, not only in consolidation but with all the compliance and supervisory requirements through the long life of your organization.

Frequently Asked Questions

All the companies pertaining to the Private limited category are expected to have sanctioned records maintained update for the following members, charges, loans and investments.

Yes. RoC compliance for 'Private Limited Companies' is mandatory for every certified company. Irrespective of the entire turnover or the capital amount, the company should comply with the annual compliance mandates. The 'annual compliance' is due after the AGM of the company every it's an initial fiscal year.

From July 2018, companies missing to follow the statutory compliance for Private Limited has been charged ₹100 for 'each day' of a delay till the exact date of filing. For constant non-compliance/failure, penalty apart from the additional Government fee can be levied on both – company and directors, including the imprisonment.

Every Private Company whose paid-up capital is less than five croresneed to get their annual return signed by Company Secretary in Practice.

Audited financial statements are mandatory for each and every company after its incorporation. The company must file the audited financial/administrative records only. Also, non-audit of the financial statement is not an excuse to delay the annual filing.

A company can opt to designate a statutory auditor either for five consecutive years or till the ending of next AGM. Nevertheless, a designation of the statutory Auditor cannot be taken as a part of 'annual compliance'.

Form ADT-1 is required to be applied for appointment or removal of Statutory Auditor.

It is mandatory as per the Latest Companies Act to submit the signed Director Report for each and every fiscal year with MCA by filing an annual return of the company. The Director Report is taken as an attachment for the form 'MGT-7'.

MGT-9 is an attachment to the company's director report, which is an extract of MGT-7 and discusses the following :

1. Certification and other details like CIN, date of incorporation, companies name and address of a registered office

 2. Policy business activity of the company

 3. Of holding, subsidiary, and associate companies

 4. Shareholding model

 5. Liability of the company

 6. Compensation of managing directors, directors and manager, and key managerial personnel.

 7. Penalties/ Punishment/ Compounding of offence

Such intimation can be made through filing MGT-7 by the company.

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