Overview

The term compliance describes the ability to comply with orders, set of rules, or requests. 

A private limited company that has been incorporated in India must ensure the compliances concerning the Companies Act, 2013 are adequately met.

The Companies Act, 2013 regulates the appointment, qualification, remuneration, and retirement of the Company's Directors and other aspects such as conducting board meetings and shareholder meetings. The ROC compliance for registered Private Limited Companies is necessary. Irrespective of the total turnover or the capital amount, the company must comply with the annual compliance requirement. All companies registered in India like a private limited company, one person company, limited company, and section 8 company need to maintain the annual compliances like annual returns and income tax return each year. Though Company Registration happens to be the most popular form of starting a business, various compliances need to be followed once the business is Incorporated.

Managing the business's everyday operations while complying with the difficult corporate laws can be a task for the entrepreneur. So, it is always better to take the professionals' help and understand the legal requirement to ensure timely fulfilment of these compliances to waive off the penalties or fines. Here, we will look at some of the Common compliances that a private limited company has to ensure mandatorily.

What are compliances to be maintained by the Private Limited Company?

Commencement of business ( within 180 days)

For companies registered in India after November 2019, having a share capital, it is necessary to obtain a commencement if business certificate before commencing any business or exercising the borrowing powers. The commencement of business certificate must be obtained within 180 days of incorporating a Company.

In case the individual fails to obtain this certificate, there is a penalty of Rs. 50,000 for the company Rs. 1000 per day for the directors for each day of default.

Auditor Appointment (Within 30 days)

All registered Indian Companies must appoint a Statutory auditor within 30 days of incorporation. If the company fails to appoint an auditor, the company won't be allowed to commence business. Also, there is a penalty of Rs.300 per month.

Income Tax Return

Income tax returns need to be filed on or before 30th September 2021 for the Financial year 2020-21.

MCA Form AOC4

The registered private limited companies must file MCA Form AOC-4 on or before 30th November 2021 for the FY2020-21. Failure to file AOC-4 will attract a penalty of Rs. 200 per day of default or delay.

MCA Form MGT-7

It is necessary to file MCA form MGT-7 on or before 31st December 2021 for FY2020-21. Failure to file MGT-7 attracts a penalty of Rs.200 Per day of default or delay.

DIN eKYC

All the directors of the company must be filed for the DIN eKYC or DIR-3 eKYC. In DIR-3 eKYC, the Director must provide a unique personal mobile number and a personal email address. There's a penalty of Rs. 5000 in case of failure to file DIN eKYC.

Hold Annual General Meeting

For a private limited company, it is mandatory to hold an annual general meeting once a year. Companies are required to keep their AGM within six months from closing the Financial year.

Director's report

Preparation of the Directors report will be done with all the information required under Section 134.

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FAQs

Which form is to be file for the appointment of the statutory auditor?

Form ADT-I is filed for appointing or replacing the Statutory Audition

Which form is attached to the Companies Director Report?

MGT-9 is attached to the company's director report, which is an extract of MGT -7

Are audited financial statements mandatory while annual filing of Private limited companies?

Audited financial statements are necessary for every company from its incorporation. The company must file the audited statements only.

Does the appointment of statutory auditor fall under annual compliance?

A company can appoint a statutory auditor either for five consecutive years or till the conclusion of the next Annual general meeting. Therefore, an appointment of the statutory auditor cannot be considered as a part of annual compliance.

What are the compliances for a private limited company?

A company is required to maintain the compliances once the company is incorporated. The auditor is to be appointed within 30 days. Additionally, there is income tax filing and annual return filing that is to be done every year.

Is it necessary to conduct the AGM?

The annual general meeting (AGM) is held for the management and the shareholders to interact with each other. The Companies Act,2013 makes it compulsory to hold meetings to discuss the yearly results and appoint auditors.

Is it mandatory to get a private limited company audited?

The statutory audit as the name suggests is a mandatory audit for all companies. All the entities that are unregistered under the Companies Act as Private or Public Limited Companies need to get the books of accounts audited every year.

How to file annual returns for a Private Limited Company?

The companies incorporated under the Companies Act,1956 are required to file the following documents with the ROC

• The balance sheet in form 23AC which is to be filed by all the companies
• Profit and loss account in form 23ACA which is to be file by all the companies.