Accounting & 
Taxation 

Annual Compliances for Private Limited Companies

The ability to adhere to demands, rules, or directions is referred to as compliance.

A private limited company that was founded in India must ensure that the Companies Act, 2013, regulations are correctly implemented.

The 2013 Companies Act regulates board and shareholder meetings, as well as the appointment, advancement, pay, and retirement of the company's directors.

RoC compliance is necessary for registered Private Limited Companies. Regardless of total income or capital expenditure, the business must satisfy the annual compliance obligation.

 

The filing of yearly returns and income tax returns is a requirement for all businesses that have been registered in India, including private limited companies, one-person businesses, limited corporations, and section 8 firms. Although registering a company is the most popular option to start a business, there are a number of compliances that must be met once the company is formed.

It could be difficult for the entrepreneur to run daily operations while abiding by the intricate company laws. So, in order to ensure fast fulfilment of these compliances and prevent penalties or fines, it is always best to seek the advice of professionals and understand the legal requirements.

In this section, we'll look at a few typical regulations that a private limited company must follow mandatorily.

 

What laws must be followed by the Private Limited Corporation?

The criteria for compliance for Private Limited Companies have undergone substantial modifications throughout time. The following is a list of the private limited company compliance due dates for 2021.

Compliance Description commencement of operations ( within 180 days)

Firms having a share capital that were registered in India after November 2019 are required to obtain a commencement of business certificate before establishing a business or using their borrowing authority. The initiation of business certificate must be obtained within 180 days of a company's incorporation.

The corporation will be fined Rs. 50,000 and the directors will be fined Rs. 1000 per day for each day of noncompliance if the individual does not get this certificate. the selection of an auditor (Within 30 days) All Indian companies that are registered are required to hire a Statutory auditor after 30 days of establishment. If no auditor is chosen, the company won't be allowed to open for operation. There is also a monthly fine of Rs. 300.

Income tax returns for the fiscal year 2020–21 must be submitted by September 30th, 2021, or earlier.

Registered private limited companies must submit the MCA Form AOC-4 for the FY2020–21 by November 30, 2021, or earlier. There is a Rs. 200 punishment for each day of default or delay under AOC-4 failure.

 

Each director of the company must file the DIN eKYC or DIR-3 eKYC. The DIR-3 eKYC form requires the Director to provide both a unique personal mobile number and a personal email address. A fine of 5000 rupees is assessed for failure to provide DIN eKYC.

 

AGMs ought to be held annually.

A private limited company must always hold an annual general meeting. AGMs for businesses must be held within six months of the conclusion of the fiscal year.

Directorial Report

All of the information required under Section 134 will be used to create the Directors report.The Directors report will be prepared using all the data required by Section 134.

 

Compliance with Regulations and Audits

The statutory audit compliances are carried out to determine whether a business delivers accurate facts of the financial status by looking at the bank balances, bookkeeping records, and financial transactions.

• A statutory auditor is appointed by the corporation.

 

• The annual accounts will be finished by the company's auditors.

R.O.C. Filings Each Year

Limited by Private Information on a business's shareholders, directors, and other stakeholders must be included in the yearly accounts and reports that must be submitted to the company registrar.

The following forms must be submitted annually to the ROC:

Within 60 days of the annual general meeting, Form MGT-7 (Annual Returns) must be filed.

Within 30 days, a private limited company must provide Form AOC-4 (Financial Statements), which includes the balance sheet, the statement of profit and loss, and the director report.

Entire Meeting of the Year

Once a year, within six months of the conclusion of the fiscal year, a meeting of the shareholders must be conducted.

AGMs are called, among other things, to approve financial statements, declare dividends, name or re-name auditors, award commissions, and pay directors.

The meeting is held within regular business hours on a day that is not a holiday. It must occur in the location where the company was registered or in the town, city, or municipality where the registered office is situated.

board meeting

The first meeting of the Board of Directors of the Company shall be held within 30 days after the Company's establishment.

A minimum of two directors, or one-third of the total number of directors, should be present at each of the board's four meetings, which should happen once every three months.

The meeting's discussion must also be documented, recorded in the minutes, and kept on file at the company's registered office.

A reminder regarding the date, time, and purpose of the meeting should be distributed seven days beforehand.

Directors Report The Director is expected to submit information on his directorships in other companies once a year. This can be done by annually presenting a written proclamation to the corporation.

Respect for Income Taxes

• Quarterly tax payments in advance

• Filing tax returns for income

• Tax audit (needed if a company has gross receipts or revenue that exceeded Rs. 1 crore in the year preceding to the assessment year); and • the submission of the tax audit report.

Several additional event-based Compliances

Every time an event takes place within the organisation, further compliances must be done in addition to the annual filings.

Here are some specific instances of such incidents:

• Changes to the company's authorised or paid-up capital.

• Share transfers or stock issuance; lending money to other companies; lending money to directors

• The appointment and salary of a managing or full-time director; • The opening, closing, or changing of signatories on a bank account; • The appointment or replacement of the company's statutory auditors.

A certain form must be delivered to the registrar within a specific amount of time for each of these occurrences. Further fines or penalties may be imposed if this is neglected. As a result, prompt compliance with such obligations is necessary.

Non-compliance

If a corporation violates the rules and guidelines of the Companies Act, the company and any of its defaulting members will be penalised for the duration of the default.

In the case that the yearly filing is postponed, additional fees are needed. Hence, completing the compliances on time is always preferred.

Dedicated Advisor

Your company will be given a dedicated Compliance Manager who will work as your point of contact and help you maintain your firm compliant. Anytime you need assistance with matters relating to your Company's compliance, contact your Compliance Manager.

Accounting

All firms are required to keep records and create financial statements at the end of each fiscal year. At the end of the fiscal year, our Compliance Manager will help your company with financial statement creation and account maintenance.

Secretarial services

Businesses are required to hold at least four board meetings, an annual general meeting, a directors report, and an annual report each fiscal year. Our Compliance Manager will assist you in preparing all secretarial reports and board meeting minutes.

MCA Yearly Returns Filing

The annual general meeting of a company must be held within six months of the end of the fiscal year. Moreover, an MCA annual return is to be turned in by September 30 at the latest. Our Compliance Manager will create and file the MCA annual return for your company.

Making Tax Return Submissions

A business is required to file an income tax return regardless of revenue, profit, or loss. So, even dormant enterprises that conduct no transactions are required to submit an income tax return each year. Our Compliance Manager will produce all the paperwork and your company's income tax return.