Annual Compliances for Private Limited Companies. 14 most important compliances to be adhered to.

Annual Compliances for Private Limited Companies – With formation of company comes several statutory compliances which requires mandatory adherence. Compliances of Private Limited Companies/One person Company is less than that of Public Companies. Companies Act, 2013, Income Tax Act and GST Act, have laid out certain annual compliances for companies which has to be adhered to.

For understanding about Company Registration in India including process, minimum requirements and mandatory compliances to be made refer article https://www.taxledgeradvisor.com/company-registration-in-india/

Mandatory Annual Compliances for Private Limited Company

Mandatory Annual Compliances for Private Limited Companies are as follows :

1. FIRST BOARD MEETING: Auditor must be appointed within 30 days of incorporation and relevant MCA form should be filed to intimate ROC. The Board members should be given at least 7 days prior notice.
2. SUBSEQUENT BOARD MEETING: A minimum of 4 board meetings must be held by company in a year with a gap of not more than 120 days between 2 board meetings.
3. DISCLOSURE OF INTEREST BY DIRECTOR: Director has to disclose interest every year along with whenever there is change in interest.
4. FIRST AUDITOR: First Board Meeting should be held within 30 days of incorporation and auditor appointment should be made in the same meeting. The auditor will be appointed till the completion of 1^st AGM. MCA Form ADT-1 is not mandatory to be filed in case of first auditor.
5. SUBSEQUENT AUDITOR: The board of directors shall appoint the subsequent audit for 5years i.e., from conclusion of first AGM till conclusion of 6^th AGM. MCA Form ADT-1 is mandatory to be filed by company within 15days of such appointment in case of subsequent auditor.
6. STATUTORY AUDIT: Statutory auditors will be responsible for audit of annual accounts of the company finalized by management.
7. BANK ACCOUNT: A Company must have a bank account which should be opened within 180 days of such incorporation and share capital must be deposited in company bank account and obtain a commencement of business certificate from MCA.
8. SHARE CERTIFICATE: Share Certificates should be allotted within 2 months from the Date of incorporation
9. ANNUAL GENERAL MEETING: For companies, it is mandatory shareholder meeting (AGM) every year within six months from the closing financial year. Key agenda of AGM will include approval of financial statements, declaration of dividends, appointment or re-appointment of auditors, commission, remuneration of directors, etc.
10. ANNUAL COMPLIANCE:
    • Mandatory annual compliances are filling of form MGT-7 & AOC-4 within 60 days from the date of AGM and within 30 days from date of AGM respectively.
    • Form MGT-8 is mandatory form if turnover of the company exceeds INR 50 crores or share capital is greater than INR 10 crores. This form has to be certified by Company Secretary.
11. INCOME TAX RETURN:
    • Income tax return filling is mandatory for companies using form ITR-6.
    • advance tax Quarterly payment,
    • Deduction of TDS/TCS, monthly payments of TDS/TCS and filling of Quarterly TDS/TCS return, I f applicable
    • Tax audit (mandatory in case the turnover or gross receipts of a business exceeds Rs. One crore in the previous year relevant to the assessment year). Refer chart tax audit applicability F.Y. 2021-22 to check applicability status.
12. DIRECTOR KYC: MCA Form Dir-3KYC is mandatory to filled every year on or before 30^th September from closure of relevant year.
13. COMPANY REGISTERS: Compulsory registers must be kept at registered address of the company at all times. They are registers of members, register of directors, register of related party transactions, register of director shareholder and register of transfer.
14. OTHER EVENT BASED COMPLIANCES: Besides the annual compliance firm, there are event-based compliance form available on MCA portal that needs to be complied by company on occurrence of such event.  These forms are to filled with specific due dates to avoid late fees and penalty. Few examples are:
    • Change in MOA
      • Change in Objects Clause
      • Change in Capital Clause
      • Change in Name Clause
    • Increase in Authorized Share Capital
    • Issue of shares at Premium
    • Share Transfer
    • Appointment, Resignation & Removal of Director
    • Appointment, Resignation & Removal of Auditor

All the Compliance forms are available on MCA Portal >> https://www.mca.gov.in/content/mca/global/en/home.html

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