Compliances for Private Limited Company In India
Every company whether it is a Private Limited Company
or Public Company
or One Person Private Limited Company
incorporated under the Companies Act 2013, is its responsibility to fulfill all the procedures and follow the instructions provided by the Ministry of Corporate Affairs for the benefit of our company.In this topic, the meaning of private company benefits of compliance of the private company, documents required for compliance of the company, and results for noncompliance of the company are explained.A private company is a company that is formed and owned by private individuals and is not governed by the government. Private limited companies
must file compliance with the ministry of corporate affairs in order to prevent unnecessary penalties. Let’s see what is ROC filing, how it’s done, and the requirements for compliance.The compliance of private companies is filed by the Registrar of Companies (ROC) in the Ministry of Corporate Affairs. It is an administrative office that looks after all the work under the Companies Act 2013. Any company incorporated under this act must document its annual compliance with ROC.
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What are the benefits of company ROC annual compliances in a Private Limited Company?
- Maintaining proper compliance with ROC avoids you to face certain penalties by the Ministry of Corporate Affairs (MCA).
- If you’re a non-compliant, investors step back from funding your company.
- The customer's confidence is gained as you fulfill all the requirements of the government.
- The government may disturb your functions of business if you don’t file the necessary documents with the Ministry of Corporate Affairs ( MCA).
- It helps you to gain credibility from the investors, stakeholders, etc.
Mandatory Documents Required for Compliances of the Private Company?
For filing compliance with ROC, there are some documents that are required,
- MOA and AOA.
- Digital signature of all directors.
- Bank statement of the company for the full year.
- Consent of directors and members.
Checklist for Compliances of the Private Limited Company
- Board meetings must be conducted by every company within 30 days of registration. Either 1/3rd of the directors or a minimum of 2 directors should be present in the meeting and they should inform before 7 days prior meeting. Private companies should conduct a minimum of 2 board meetings in a year by filing a declaration form DIR-8 and disclosure of directors' interest by filing MBT-1.
- The auditor must be appointed by the company within 30 days of incorporation by taking the consent of the auditor and filing an e- form ADT-1 with prescribed fees with MCA.
- The company must file an INC-20A business commencement certificate by submitting a current account statement that contains proof of submission of the prescribed amount within 180 days of the registration of the company. Consequences for not filing will be either payment of a delayed fee or the winding up of a company by MCA.
- It is the duty of companies to prepare financial statements such as balance sheets, profit or loss accounts, etc in order to update your information with MCA for compliance.
- It is necessary to file income tax returns with the income tax department every year as it comes under the compliance requirements list.
- The annual general meeting should be conducted on or before 30th September of each year. If the general meeting is conducted for the first time, the time period will be extended up to 31st December of the year.
- After every annual meeting, the company should file MGT-7 for filing annual returns within 60 days from the date of the meeting. MGT-7 will include a notice of AGM, a notice of directors, a director's report, etc.
- Not only filing an annual return, but it should also comply with the balance sheet, profit or loss account, audit report, etc. by filing AOC-4 within 30 days of the meeting held.
- It is advisable to maintain statutory registers according to the prescribed format.
- In case of outstanding payment dues to vendors beyond 45 days, then the company has to file an MSME-1 e- form.
- Form DIR-3 KYC should be verified by all the directors through mobile numbers and email addresses both. In case of any changes, it should be notified by filing DIR-3 KYC.
- Receipt of deposit or any other outstanding payment must be informed to MCA by filing DPT-3.
- A private company having a turnover of ₹50 crore or ₹10 crores of paid-up capital or more should be certified by any company secretary and that must be filed in form MGT-7.
These are the mandatory requirements that should be prepared by the company for Compliance
List of monthly and Annual Requirements for filing compliances
With the above-mentioned requirements, these are some of the other essentials required for filing compliance.
- Monthly or quarterly GST Returns ( if registered under goods and services tax).
- Monthly TDS payments and quarterly TDS payments.
- Monthly ESI and EPF return.
- Preparation of financial statements as per companies acts 2013.
- Annual general meeting of a private limited company.
- Income tax return file.
- Form MGT-7 annual return of the company.
- Form AOC-4 filing financial statements and other documents of the company.
- Income tax return file of directors.
- Audit report certified by CA.
Consequences for Non- compliance of the private limited company.
Yes, compliance of private companies is mandatory and every public-One person or Private person company must file compliance with MCA according to the companies act 2013. If the company fails to comply it faces consequences such as,
- Directors will be disqualified and they cannot be re-appointed as directors of that company or any other company for 5 years from the date of disqualification.
- Failed to file an annual return (Form MGT-7), in that case, the company and members are liable to pay a penalty of up to ₹50000, if it continues then the penalty would be ₹100 for every day which would extend up to ₹500000.
- If the company fails to maintain financial statements for every year without filing the AOC-4 form, it is liable to pay ₹1000 every day till the failure continues which cannot go beyond ₹10,00,000.
- For not conducting the annual general meetings, the penalty charged to the company and its members are ₹1,00,000 if the failure continues it is required to pay ₹5000 every day.
- Directors will be held for not disclosing their interests and will either be prisoned for up to 1 year or a penalty of ₹1,00,000 to be paid or both.
- Non-compliance for DIR-3 KYC will be charged ₹5000.