Annual Compliances For

Private Limited Company

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An Overview on Private Limited Company Annual Compliances

A Private limited Company is a separate legal entity i.e. its identity is different from its shareholders and members completion of all the compliances is necessary to keep the company up to date and active by status which is done through the regular filing of forms with the Ministry of Corporate Affairs (MCA). in Every fiscal year, every private limited company must file an annual return and audited financial records with MCA. Regardless of the turnover, whether it is zero or in crores, the filing of annual return and audited financial statements with the Registrar of Companies file is compulsory. The form’s includes a report on the activities and financial data for the Financial Year end. The time of the Annual General Meeting of the company determines the due date for the company's annual filing every year. Perpetual failure, including director incompetence, may result in the company's name being removed from the register of companies. It has also been noted that MCA has made proactive steps to address any such failures.

NOTE:

The company's compliances might be divided into two categories: mandatory compliances and event-based compliances.

Some Mandatory Annual Compliances

Listed are the mandated compliances that a Private Limited Company must ensure to comply every year:

Icon Board Meetings

As per the companies act 2013 minimum 4 Board Meetings to be held in every calendar year with a gap of not more than 120 days between 2 consecutive board meetings.

Icon First Board Meeting

The first meeting of the Board of Directors, is necessary to be held within 30 days of the Incorporation of the Company.

Icon Directors' disclosure of Interest -

Every Director shall:

  1. at the first meeting where he participates as the 'Director' OR
  2. at the first meeting of the Board in each Financial Year
  3. and whenever there is a change in the disclosures already made then at the first board meeting held after such change must disclose his interest in the Form MBP 1 (along with a list of relatives & attention of relatives in the company as per relative definition), his/her interest in anybody corporate, organizers/firms, or all other organizations of the individuals (includes the shareholder interest).
  4. Form MBP-1 shall be kept in the registers of the 'company'.

Icon First Auditor

Within 30 days after incorporation, the Board of Directors will appoint the Company's first auditor, who will serve till the conclusion of l the 1st Annual General Meeting. The filing of Form ADT-1 is not compulsory as per the companies act 2013 in the case of the First Auditor.

Icon Annual General Meeting

An Annual General Meeting (AGM) is held to have an interaction between the management and share holders of the company All companies except one person company (OPC) should hold an AGM after the end of each financial year. A company must hold its AGM within a period of six months from the end of the financial year i.e. on or before September 30th of each year However, in the case of a first annual general meeting, the company can hold the AGM in less than nine months from the end of the first financial year. The company must give a clear 21 days’ notice to its members for calling the AGM. The notice should mention the place, the date and day of the meeting, and the hour at which the meeting is scheduled. The notice should also mention the business to be conducted at the AGM. A company should send the notice of the AGM to all the members, directors and statutory auditors of the company. The notice may be given in writing through speed post or registered post or via electronic mode.

Icon Subsequent Auditor

The Board of Directors appoints the Statutory Auditor at the first Annual General Meeting of in the Company, who shall hold the position till the conclusion of the 6th Annual General Meeting subject to ratification at every Annual General Meeting and notifying the same ROC by filing form ADT-1. FORM ADT1 is to be filed by the company within 15 days from the DATE of the 'APPOINTMENT' or Date of the Meeting in which such appointment is made.

Icon Filing of Annual Returns (Form MGT-7)

Form MGT-7 is a part of mandatory annual compliances for the companies who are incorporated under The Companies Act. Form MGT-7 is annual return of the company and is used to file the basic information related to the company, its shareholders, and directors of 31st March with the Registrar of Companies every year within 60 days from the AGM.

Icon Form MSME-1

It is part of mandatory annual compliance for every company having outstanding dues to the MSME registered firm or company. companies should file Form MSME-1 when payments are due to MSME for more than 45 days from the date of acceptance of the services or goods, along with the reason for its delay. The MSME-1 is a half-yearly return that the specified companies need to file regarding their outstanding payments to the MSME. In this manner, the ROC can keep track of the companies that have outstanding dues towards MSMEs and the MSME suppliers who need to receive payments

Icon Form AOC-4

Form AOC-4 is used to file the audited statements of the company with the Registrar of companies every year within 30 days from the AGM. In the case of consolidated financial statements, to the company shall file the AOC 4 CFS. To know about them in detail visit our website for more information.

Icon Form ADT -1

ADT-1 is a form filed for the Appointment of Auditor of the company and is to be filed by every company within 45 days of its 'incorporation' for the appointment of First Auditor of the company. Adding on, Form ADT- 1 is used by a company to intimate the registrar of companies about the appointment of an auditor within 15 days of its annual general meeting (AGM).

Icon Form DPT-3

To protect the interest of creditors or depositors, the Government in consultation with the Reserve Bank of India brought the amendment in the Companies (Acceptance of Deposits) Rules 2014 through the companies (Acceptance of Deposits) Amendment Rules 2019. DPT 3 is a return of deposits that companies must file to furnish information about deposits and/or outstanding receipt of loan or money other than deposits.

Icon AUDIT OF Accounts (Statutory)

At the end of the Financial Year, every company must prepare its accounts and have them audited by a Chartered Accountant or other appropriate person. The Auditor needs to submit an Audit Report as well as the Audited Financial Statements to the company.

Annual Compliance Calendar

S.No. Compliances To be Done When is this compliance to be done? Govt. Fees Penalty for Non-compliance (For Authorized Capital upto Rs. 4.99 lac)
1. Issue of Share Certificates The company must issue the Share Certificates to its share holders within 2 months of its Incorporation or new allotment NA Company: Fine from Rs. 25,000 which may extend to Rs.500,000 (AND) Directors: Fine from Rs.10,000 which may extend to Rs. 100,000.
2. Declaration for Commencement of Business The company is required to file a Declaration for Commencement of Business within 180 days of incorporation. 300/- Company: Fine of Rs. 50,000. (AND) Director in Default: Rs. 1000 for every day of delay which may extend to Rs 1,00,000
3. Auditor Appointment Compliance (ADT-1) The company is required to file return of Appointment of first auditor within 45 days of its Incorporation and auditor appointed at the AGM must be filed within 15 days of the AGM 300/- Company: Fine from Rs. 25,000 which may extend to Rs.500,000. (AND) Director in Default: Shall be punishable with imprisonment upto 1 year or with minimum fine of Rs. 10,000 which may extend to Rs. 1,00,000 or with Both.
4. MSME I Filing The company is required to file half yearly returns in the month of April & October to ROC for payments due to Micro & Small Enterprises for more than 45 days. 300/- Additional ROC Filing Penalty: Upto 12 times of normal filing fees of form MSME I (AND) Liable to be prosecuted under MSMED Act 2006 and ROC.
5. DPT-3 Filing (Return of Deposits) The company is required to file return of deposit or particulars of transaction not considered as deposit or both. on before 30th June of the Subsequent F.Y. 300/- Additional DPT-3 Filing Penalty Upto Rs. 3,900 (12 times) of normal filing fees
6. DIR-3 DIN KYC Filing All the directors of the company are required to file KYC by 30th September every year NA Additional Fees of Rs. 5000 per DIN
7. Statutory Registers 7 to 8 Mandatory Registers to be maintained and updated from time to time NA Penalty: Rs. 50,000 which may extend to Rs. 3,00,000 (AND) Further fine: Rs.1,000 day for which the default continues.
8. Annual General Meeting (AGM) Compliance AGM to be held every year Minutes of AGM to be prepared Notice of AGM should be given in advance. Attendance Register of every General meeting to be maintained. NA Default in holding AGM: Company and Directors: in default shall be punishable with fine which may extend to Rs. 1,00,000 (AND) Rs. 5,000 for every day of delay Minutes Book Maintenance: Company: Penalty upto Rs. 25,000 Directors in default: shall be liable to a penalty of Rs. 5,000.
9. Annual ROC Filings Filing Annual Return (MGT-7) Filing Financial Statements (AOC-4) ADT-1 (Auditor Appointment) Every company is required to file its Annual Return (MGT-7) with the ROC within 60 days of Event Date/Meeting Date. The Financials (AOC-4) also to be filed within 180 days from end of financial year.The Auditor Appointment (ADT-1) to be filled within 15 days from the Event Date/Meeting Date. 300/-(per form) Additional ROC Filing Penalty: ForAOC-4, Rs. 100 per day For MGT-7, Rs. 100 per day (AND) Company: shall be punishable with fine of Rs. 50,000 which shall extend to Rs.5,00,000.
10. Board Meeting Compliances 1st Board Meeting thirty days of date of incorporation and One Board Meeting to be held in each quarter of the financial year. Minutes of meeting to be prepared, Notice of Meeting should be given the Attendance Register of every meeting to be maintained. NA Company: Fine from Rs. 25,000 (AND) Director in default: liable to a penalty of Rs.5,000. (AND) Non-compliance in Issue of Notice of Meeting, Director shall be liable to a penalty of Rs. 25,000

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The Advantages of Annual Compliance

Pull more Investors

The financial records and compliances are the major emphasis elements for investors. Before investing in a company, investors check if the yearly returns are filed on the MCA portal or not. Investors are always inclined to favour the companies with regular compliance. As a result, a private company must file yearly compliance regularly to attract more investors.

Increased Credibility of the Company

The date of the company's annual return filing is published on the MCA portal-compliance with the law is a vital obligation for each company. Regularity in compliance is a key criterion for determining a company's trustworthiness, whether for government bids, loan approval, or other objectives. Compliance consistency improves a company's credibility, attracts more consumers, and aids in gaining government tenders and loan clearance.

Sustaining a company's active status and preventing fines

To prevent penalties, a private company must file annual compliances regularly. Failure to file the annual compliance might potentially jeopardize the company's financial position. It's also possible that the company will be declared defunct or removed from the ROC if non compliances is found regularly. The directors in default are also prevented from being appointed in the future.

Since July 2018, an extra cost of Rs100 has been charged for each day delay of late submission

Annual Compliance Checklist for Private Limited Company

The checklist is consolidated to help you in taking the RIGHT step in your start-up :

  • Payment of periodic 'dues' (GST Liability, TDS & TCS the mandate one)
  • Non-Registrar compliance of periodic returns- (Monthly, Annual Returns, Quarterly, GST, TDS, etc.)
  • GST Returns (Monthly/Quarterly)
  • TDS Returns quarterly
  • Filling of ITR (tax will be obligatory at a flat rate of 25% plus Education Class)
  • Periodic assessment of advance tax liability and payment of advance tax.
  • Filing of Tax Audit Report
  • Tax Audit Report (filing)
  • Under several acts of law, trade is assessed administratively (E.g., Environment and Protection Act, Money Laundering Act, Competition Act, Factory Act, etc.)

Documents Needed for a Company's Annual Filing

  1. PAN card
  2. Incorporation Certificate and,
  3. MOA-AOA of PRIVATE LIMITED COMPANY
  4. Audited Financial STATEMENTS
  5. Financial Statements must be audited by an statutory auditor.
  6. Reports from the Audit Committee and the Board of Directors
  7. Director's DSC

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