Compliances for a Private Limited Company in India: A Quick Overview
Adhering to statutory requirements under the Companies Act, 2013 and Income Tax Act is mandatory for all Private Limited Companies in India. This guide covers annual and event‑based compliance obligations to maintain legal standing and avoid penalties.
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What Is Compliance for a Private Limited Company?
Compliance means adhering to laws, rules, and regulations. For a Private Limited Company in India, it involves meeting requirements laid out under the Companies Act, 2013—such as director appointments, board and shareholder meetings, and statutory filings with the Registrar of Companies (RoC). It also includes Income Tax Act obligations like filing returns and paying advance tax.
Why Proper Compliance Matters
Every registered Private Limited Company—regardless of turnover or capital—must complete annual filings (e.g., ITR, annual returns) and event‑based filings (e.g., changes in directors, share capital). Failing to comply can lead to heavy fines, director disqualification, loss of “Active” status, or even strike‑off by the RoC.
Benefits of Timely Compliance
• Enhanced Company Credibility: Publicly visible compliance status on the MCA portal builds trust with investors, banks, and partners. • Easier Fundraising: Investors review ROC filings before investing; clean compliance records attract venture capital and loans. • Active Status Maintenance: Avoid penalties, disqualification of directors, and the risk of being struck off by RoC. • Legal Security: Prevents heavy fines and legal actions against both company and its officers.
1. Documents Required for Annual Filing
• PAN Card of the Company
• Certificate of Incorporation (COI)
• Audited Financial Statements (Balance Sheet, P&L Account, Cash Flow Statement)
• Memorandum of Association (MOA) and Articles of Association (AOA)
• Independent Auditor’s Report (signed by a registered Chartered Accountant)
• Board Report and Audit Report (approved and signed by directors and auditors)
• Digital Signature Certificate (DSC) of at least one director
Cost of Annual Compliance
The annual compliance cost varies by company size and complexity, typically including: • RoC Filing Fees (Forms MGT‑7, AOC‑4, ADT‑1, etc.) • Accounting and Bookkeeping Charges • Statutory Audit Fees • Income Tax Return (ITR) Filing Fees • GST and TDS Return Filing Charges • Legal and Professional Fees (CA/CS/legal advisors)
Listicles
Penalties for Non‑Compliance
- Heavy late fees for delayed ROC filings (Form MGT‑7, AOC‑4, etc.) and tax returns (ITR, GST, TDS).
- Disqualification of directors for failure to file annual returns within prescribed deadlines.
- Loss of “Active” status and potential strike‑off by the Registrar of Companies.
- Legal action and monetary fines for non‑adherence to Companies Act or Income Tax Act provisions.
Mandatory Compliance Checklist
- Statutory Audit Compliance: Appointment of a statutory auditor and audited financial statements every year.
- Annual ROC Filings: Form MGT‑7 (Annual Return) within 60 days of the AGM; Form AOC‑4 (Financial Statements) within 30 days of the AGM.
- Appointment of Auditor: First statutory auditor must be appointed within 30 days of incorporation.
- Annual General Meeting (AGM): Hold within six months of financial year‑end; first AGM within nine months of first financial year‑end.
- Board Meetings: Minimum of four meetings per financial year, with no more than 120 days between meetings; first board meeting within 30 days of incorporation.
- Director’s Report: Prepare and file annually, disclosing financial performance, other directorships, and compliance declarations.
- Income Tax Compliances: File ITR annually; pay advance tax quarterly (if applicable); conduct a tax audit if turnover exceeds ₹1 crore.
- Event‑Based Filings: File applicable RoC forms for changes in share capital, director appointments/resignations, registered office address, or change of auditors.
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