Mandatory Compliances for a Private Limited Company in India

Home Blog Mandatory Compliances for a Private Limited Company in India

Mandatory Compliances for a Private Limited Company in India

Private limited companies have become one of the most preferred formats of the constitution of business. There has been a rise in private limited company registrations, especially after the start-up era has begun. However, with private limited company registration comes a series of compliances that a company shall adhere to. Let’s take a quick look at ROC compliance checklist for private limited companies as well as certain other compliances for the companies.

Private Limited Company Compliances

Here’s the statutory compliance checklist for private limited companies relating to the private limited company that you shall adhere to:

  • Declaration of Commencement of Business: Once the company gets incorporated, it needs to file a declaration of commencement of business by filing Form INC-20A. The declaration shall be filed within 180 days from the date of incorporation of the company. However, the companies that were incorporated before 2nd November 2018 or companies without share capital incorporated on or after 2nd November 2018 shall not be required to file the declaration of commencement of business.
  • First Board Meeting: After the incorporation of the company, the board of directors of the company shall hold the first board meeting within 30 days from the date of incorporation. Notice of the board meeting shall be sent to each director of the company at least 7 days before the meeting.
  • Subsequent Board Meetings: The directors shall hold at least 4 board meetings in every calendar year and the gap between two such meetings shall not exceed 120 days. 
  • Appointment of Auditors: The board of directors shall appoint the first auditor of the company within 30 days after the incorporation of the company who shall hold office till the conclusion of the first annual general meeting. Thereafter, in the first AGM, the company shall appoint subsequent auditor who shall hold office from the conclusion of the first AGM till the conclusion of the 6th AGM. The company shall intimate about the appointment of auditors by filing Form ADT-1 within 15 days from the date of appointment.
  • Annual General Meeting: The company shall hold the annual general meeting within 6 months from the end of the financial year such that the gap between two such meetings shall not exceed 15 months.
  • Annual Return: Every company shall file its annual return in Form MGT-7 within 60 days from the date of the annual general meeting of the company.
  • Statutory Audit and Financial Statements: Every company shall get its accounts audited as per the provisions of the Companies Act, 2013 by a chartered accountant after the end of the financial year. The auditor shall provide the audit report of the company and the audited financial statements for filing with the registrar. The company shall file its financial statements in Form AOC-4 within 30 days from the date of the annual general meeting. In case of preparation of consolidated financial statements, the company shall file Form AOC-4 (CFS).
  • Disclosure of Interest by Directors: In order to ensure transparency, every director shall disclose his concern or interest (including shareholding interest) in any company, firm, body corporate or association of individuals at the first board meeting in which he participates as a director and thereafter at the first board meeting in every financial year. In case there is any change in the disclosures already made, then the director shall disclose such change in the first board meeting held after such change takes place. The disclosure shall be made by filing Form MBP-1.
  • Tax Audits and Compliances: Apart from the above MCA-related compliances, the company shall also comply with the taxation-related compliances. It includes audit as per income tax law, filing of income tax returns, TDS and TCS compliances, advance tax, filing of GST returns (including GST annual return), professional tax etc. 
  • Other Sectoral Compliances: In case any sectoral law becomes applicable to the company, the company shall ensure compliance with the requirements of such sectoral laws. For instance, the electricity act, FSSAI, banking act etc. have their own set of sectoral compliances that every company operating in that sector shall adhere to.

Event-Based Compliances for Private Limited Companies

Apart from the above statutory compliances for private limited companies, the private limited company shall also adhere to certain event-based compliances. These are not regular compliances but arise only upon the happening of certain events that require intimation to the MCA. These compliances include the following:

Sr. No Event Applicable Form Due Date of Compliance
1 Change in directors or key managerial personnel DIR-12 To be filed within 30 days of the change
2 Verification and Change in registered office INC-22 Within 30 days after incorporation. Further in case of any change in the registered office, the form shall be filed within 15 days after such change.
3 Filing of agreements and resolution MGT-14 To be filed within 30 days of the agreement or resolution
4 Change in authorised share capital SH-7 Within 30 days of such alteration
5 Increase in paid-up share capital PAS-3 Within 30 days after the date of allotment
6 Application for KYC of directors DIR-3 KYC On or before 30th September after the end of the financial year

Other event-based compliances include the change in MOA and AOA, creation of charge, related party compliances etc. These compliances have been put in place by the MCA to ensure transparency, accountability and bonafide conduct of transactions. If you have obtained private limited company registration, then it’s time you take note of the above company compliance checklist as non-compliance can attract penal actions against your company. In case of any assistance, you can reach out to your eAuditors now! 

Author : Dipen

Date     : 30-Aug-2022