Annual Compliances of a Pvt. Ltd. Company
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Updated on Feb 11, 2024 10:39:28 AM
Overview of Annual Compliance for Private Company
Annual Compliance for Private Limited Companies:
A private company is a separate legal entity that must maintain its active status through regular filings with the Ministry of Corporate Affairs (MCA). It is mandatory for every business entity, regardless of its turnover, to file an annual return and audited financial reports with the MCA for each financial year. These filings are necessary even if the company has not conducted any business activities during the fiscal year.
Both forms are utilized to report the activities and financial data for the respective financial year. The due dates for annual filing depend on the timing of the Annual General Meeting (AGM). Failure to comply with annual filing requirements may result in the removal of the company’s name from the RoC’s register, along with potential disqualification of directors. The MCA actively implements measures to address such failures.
Compliances relevant to private limited companies can be categorized into two sections: Mandatory Compliances and Event-Based Compliances.
Mandatory Annual Compliances
Annual Compliance Requirements for Private Limited Companies:
First Board Meeting: The first meeting of the Board of Directors, including directors, should be held within 30 days of the incorporation of the company. Notice of the meeting must be sent to each director at least seven days prior to the meeting.
Subsequent Board Meetings: A minimum of 4 board meetings must be held every year with not more than a 120-day gap between two meetings.
Filing of Acknowledgement of Interest by Directors: Directors are required to disclose their interests in any company, body corporate, firms, or other organizations annually, or whenever there is a change in disclosures, using Form MBP-1. This form must be maintained in the company’s records.
Appointment of First Auditor: The Board of Directors must appoint the first auditor of the company within 30 days of incorporation. The appointed auditor will hold office until the conclusion of the first Annual General Meeting (AGM). Filing of Form ADT-1 is not required for the appointment of the first auditor.
Appointment of Subsequent Auditor: The Board must appoint the auditor for the first AGM, who will hold office until the conclusion of the sixth AGM. This appointment must be notified to the Registrar of Companies (ROC) by filing Form ADT-1 within 15 days of the appointment.
Annual General Meeting (AGM): The first AGM of the company must be held within six months from the date of incorporation, and subsequent AGMs must be held annually. The appointment of the auditor should be ratified at the AGM.
Filing of Annual Return (Form MGT-7): Every private limited company must file its Annual Return within 60 days from the conclusion of the AGM. The Annual Return covers the period from April 1st to March 31st of the respective financial year.
Filing of Financial Statements (Form AOC-4): The company must file its balance sheet, profit and loss account, and director’s report within 30 days of the AGM.
Statutory Audit of Accounts: The company must prepare its accounts and get them audited by a Chartered Accountant at the end of each financial year. The audited financial statements along with the audit report must be filed with the Registrar.
Event-Based Compliances
Event-Based Compliances for Private Limited Companies:
| Actions | Form No. | Time 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 | PAS-3 | Within fifteen days from the date of the allotment |
| Change in secured borrowing | 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.) |
Essential Compliances:
| Essentials | Form No. | Time Limit |
|---|---|---|
| Change in registered office | INC-22 | Within fifteen days from the date of such change |
| Increase in Authorized Share capital | SH-7 | Within 30 days of passing OR |
| Increase in Paid up share capital | 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 | 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 |
Documents you’ll get after Company Registration
Payment of Periodic Dues and Compliance Requirements:
| Actions | Frequency |
|---|---|
| GST Liability, TDS & TCS Mandatory Payment | As per GST, TDS, and TCS regulations |
| Non-Registrar Compliance of Periodic Returns | Monthly, Quarterly, Annual |
| GST Returns | Monthly/Quarterly |
| TDS Returns | Quarterly |
| Evaluation of Advance Tax Liability and Payment | Periodically |
| Filing of Income Tax Returns | Annually |
| Filing of Tax Audit Report | Annually |
| Administrative Assessment of Trade Under Different Acts | As per respective laws |
These compliance requirements ensure adherence to various tax laws and regulatory frameworks, ensuring the smooth operation and legal compliance of the business.
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