Annual compliance of a Pvt. Ltd. company
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Overview
Compliance refers to adhering to rules, regulations, and legal requirements.
A private limited company registered in India must ensure compliance with all the
provisions of the Companies Act, 2013.
The Companies Act, 2013 regulates aspects such as the appointment,
qualifications, remuneration, and retirement of company directors, as well as
mandates for shareholder and board meetings. Annual compliance with the
Registrar of Companies (RoC) is crucial for private limited companies.
Regardless of turnover or capital, every registered company must meet annual
compliance requirements, including income tax filings and annual returns.
While registering a company is the first step in starting a business,
ensuring timely compliance with corporate regulations can be challenging for
entrepreneurs. Professional guidance is recommended to fulfill these legal
requirements and avoid penalties.
Checklist for Annual
Compliances
1. Statutory
Audit Compliance
o
Verification of bank balances, financial
statements, and bookkeeping records.
o
Appointment of a statutory auditor.
o
Completion of yearly accounts by the auditors.
2. Annual
ROC Filings
o
Submission of annual accounts and returns detailing
directors, shareholders, and other stakeholders.
o
Filing of Form MGT-7 (Annual Return) within 60
days of the Annual General Meeting (AGM).
o
Filing of Form AOC-4 (Financial Statements)
within 30 days of the AGM.
3. Auditor’s
Appointment
o
A statutory auditor must be appointed within 30
days of company incorporation.
o
Failure to appoint an auditor results in a
penalty of INR 300 per month and business operation restrictions.
4. Annual
General Meeting (AGM)
o
Must be held annually within six months from the
end of the financial year.
o
The first AGM can be held within nine months of
the financial year’s end.
o
Prior notice of at least 21 days is mandatory.
5. Board
Meetings
o
First board meeting within 30 days of incorporation.
o
A minimum of four board meetings must be held
annually, one every three months.
o
Proper documentation of discussions and
decisions.
6. Director’s
Report
o
Directors must disclose directorships in other
companies through an annual written declaration.
7. Income
Tax Compliance
o
Advance tax payments on a quarterly basis.
o
Filing of income tax returns.
o
Tax audit requirement if turnover exceeds INR 1
crore.
o
Submission of tax audit reports.
8. Event-Based
Compliances
o
Changes in authorized or paid-up capital.
o
Share transfers and director appointments.
o
Opening, closing, or modifications of bank
accounts.
o
Auditor appointments or changes.
o
Filing of relevant forms with the RoC within the
stipulated time to avoid penalties.
ROC Compliance for Private
Limited Companies
Yes, RoC compliance is mandatory. Failure to comply can lead to penalties
and legal consequences for the company and its directors. Timely and accurate
filing of documents with the Registrar of Companies ensures good standing and
compliance with legal requirements
Legal Compliance Checklist
for Startups
1. Payment
of periodic dues such as TDS, TCS, and GST.
2. Filing
of monthly, quarterly, and annual returns.
3. GST
compliance and reporting.
4. TDS
quarterly reports.
5. Advance
tax assessments and payments.
6. Income
tax filing (Flat rate of 30% + Education Cess).
7. Compliance
with sector-specific laws (e.g., Environmental Protection Act, Money Laundering
Act, Competition Act, Factory Act, etc.).
Benefits of Annual
Compliance
1. Enhanced
Credibility
o
Compliance records are publicly available on the
MCA website, influencing loan approvals, government bids, and investor
confidence.
2. Attracting
Investors
o
Investors prefer companies that regularly file
annual returns and maintain compliance.
3. Avoiding
Penalties and Legal Risks
o
Timely compliance prevents fines, legal
consequences, and potential business disqualification.
Documents Required for
Annual Filing
1. PAN
Card of the company.
2. Certificate
of Incorporation.
3. Memorandum
of Association (MOA) and Articles of Association (AOA).
4. Audited
financial statements.
5. Board
and Audit Reports.
6. Digital
Signature Certificate (DSC) of at least one director.
Cost of Annual Compliance
for a Private Limited Company
Annual compliance costs include:
1. RoC
filing fees.
2. Accounting
and bookkeeping expenses.
3. Statutory
audit charges.
4. Tax
compliance costs.
5. Legal
and professional service fees.
6. Internal
operational costs.
Exact costs depend on company size, industry, and specific regulatory
requirements. Consulting an expert can help estimate accurate compliance costs.
Penalties for Non-Compliance
Non-compliance results in penalties and legal actions against both the
company and its directors. Delays in tax and annual filings attract additional
charges. Ensuring compliance on time prevents unnecessary fines and legal
complications.
Why Choose Fastzeal as Your Compliance Partner?
Fastzeal offers end-to-end compliance solutions, including statutory audits, annual return filings, RoC compliance, tax obligations, and legal advisory services. With expertise and a client-centric approach, Fastzeal ensures smooth compliance management, helping businesses meet regulatory requirements efficiently.
Frequently Asked Questions:
A private limited company's ROC compliance pertains to the several legal and regulatory obligations it must satisfy and submit to the Registrar of Companies (ROC).
The Board should notify the company's members if it is unable to choose the auditor. The company's members will choose the auditor at an extraordinary general meeting within ninety days. The appointed auditor will remain in office until the first annual general meeting is over.
A private limited company's cost of ROC (Registrar of Companies) compliance in India can vary depending on several factors, such as the size of the business, the extent of the annual compliance activities, the operational complexity, and the particular services you select to manage the compliance.
A private company and every other company must prepare a few Documents to stay compliant with the Indian Companies Act:
1. Incorporation Documents.
2. Financial Statements.
3. Annual Returns
4. Director Identification Number.
5. Changes in Directors or Shareholders.
6. Registered Office Change.
7. Charge Management.
8. Company Filings for Approval.
Yes, the auditor of the company will be required to attend the company's AGM.
The company's first AGM must be held within nine months of the end of the financial year.
According to the Act and the Companies (Accounts) Rules, 2014, every private limited company is required to have an audit of its annual accounts throughout each fiscal year.
It is possible to run a small business without officially registering as a corporation or firm. It's commonly referred to as a sole proprietorship. But, there are a few legal ramifications that you should take into account, such as issues with legal identity, liabilities, taxes, lack of trustworthiness, development restrictions, and registration requirements.
The Companies Act 2013 in India mandates that all corporations, including private limited companies, hold Annual General Meetings (AGMs). It gives management and shareholders a forum to talk on critical issues about the operation, state of the business, and direction for the future.
Within sixty days following the date of the annual general meeting, all Indian registered companies are required to prepare and submit an annual return in the form of Form MGT 7 to the Registrar of Companies.
A penalty of twenty-five thousand rupees will be imposed on any director who disregards the requirements of the annual compliance of a Pvt. Ltd. company.
According to the terms of the Companies Act 2013, all companies registered under the Act must submit their annual report and audited financial statement via the MCA website within the allotted time frame.
In accordance with Section 139 (1) of the Companies Act, 2013, firms must notify the Registrar of Companies via Form ADT-1 of the appointment of an auditor following the Annual General Meeting (AGM).
The Act only requires that it be signed by "a director" without naming the specific Director who must do so. One of the directors' primary responsibilities is to approve the financial statements.
At the end of the financial year, companies are obliged to produce a financial Document called a directors' report. A crucial aspect of managing a firm is financial reporting.
The company must properly call a board meeting under Section 173 upon receiving the Documents to approve the share transfer and adopt the necessary resolution. The requirements of the Articles must also govern the Company about the necessity of convening Board Meetings.
