Annual Compliance Pvt. Ltd

Private Limited companies must comply with annual requirements such as conducting an Annual General Meeting (AGM) within six months of the financial year-end, preparing financial statements (Balance Sheet, Profit and Loss Account), and filing an Annual Return (Form MGT-7) with the Registrar of Companies to disclose company details and financial performance.

Click here

What is Annual Compliance for Pvt. Ltd

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.

T (27)

Benefits of Annual Compliance for Pvt. Ltd

Legal Compliance:

Fulfilling statutory requirements ensures the company operates within the legal framework, avoiding penalties and legal consequences.

Stakeholder Confidence:

Regular compliance, including AGM and financial disclosures, enhances trust and confidence among shareholders, investors, and creditors.

Financial Transparency:

Annual compliance ensures transparency in financial operations, providing stakeholders with clear insights into the company's financial health and performance.

Access to Finance:

Compliance with annual requirements strengthens the company's credibility, making it easier to secure loans, attract investors, and forge partnerships based on a solid financial track record.

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.

Filing and Audit requirement under Income Tax Act

As discussed earlier, Limited Liability Partnerships whose turnover is more than Rs.40 lakh or whose contribution has exceeded Rs.25 Lakh have to get the books of account audited by practising Chartered Accountants under the Limited Liability Partnership Act, 2008. The deadline to file the tax return for an LLP which is required to get his books audited is September 30th.
 
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:

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.
[wptb id="5404" not found ]

FAQs on Pvt. Ltd Annual Compliance

Annual compliance involves filing various forms and documents with regulatory authorities to ensure legal and financial transparency, including annual returns and financial statements.

Key compliances include filing the Annual Return (Form MGT-7), Financial Statements (Form AOC-4), holding an Annual General Meeting (AGM), maintaining statutory registers, and income tax returns.

    • The AGM must be held within six months from the end of the financial year, typically by September 30th, where the financial statements are presented to shareholders.

  •  

    • Penalties include fines and legal action against directors, ranging from monetary fines to imprisonment, depending on the severity of non-compliance.

  •  

Yes, all Pvt. Ltd companies must have their financial statements audited by a certified Chartered Accountant.

Yes, companies often hire professional services to handle compliance tasks, ensuring accuracy and timely submissions.