A Brief Explanation
Compliance refers to the capacity to follow directives, guidelines, or demands. A private limited company established in India must ensure that all requirements set forth by the Companies Act of 2013 are satisfied.
The appointment, qualifications, compensation, and retirement of the company's directors, as well as other matters like holding shareholder and board meetings, are governed by the Companies Act, 2013. For registered private limited companies, annual compliance with the RoC is essential. The organization is required to adhere to the yearly compliance requirement, regardless of the overall turnover or capital amount.
Every company registered in India, including section 8 companies, private limited companies, limited companies, and one-person firms, must complete yearly annual compliances at the end of the financial year, such as income tax filings and annual returns, every year. Although registering a company is the most common way to launch a business, after the company is incorporated, several annual compliance requirements must be met.
The challenge for the entrepreneur might be to oversee the day-to-day operations of the company while adhering to complex corporate regulations. Therefore, it is always preferable to get expert assistance and comprehend the legal requirements to guarantee that these compliances are fulfilled on time to avoid penalties or fines.
Compliances to be followed by Private Limited Company
Here is an annual compliance checklist for companies incorporated in India. The compliances followed by Private Limited Company are mentioned below:
1. Statutory Audit Compliance:
Appointment of a statutory auditor.
Completion of yearly accounts by the company's auditors.
2. Annual ROC Filings:
Filing of annual general meeting (AGM) in Form MGT-7.
Filing of financial statements in Form AOC-4 within 30 days.
3. Auditor's Appointment:
Appointment of a statutory auditor within 30 days of company formation.
4. Annual General Meeting (AGM):
AGM must be held within six months after the end of the fiscal year.
Notice of the AGM must be sent at least 21 days before the meeting.
5. Board Meeting:
First board meeting must be held within 30 days of incorporation.
Quarterly board meetings must be held with minimum attendance requirements.
6. Directors Report:
Annual disclosure of directorships in other firms.
7. Income Tax Compliances:
Quarterly advance tax payment.
Filing of income tax returns.
8. Additional Compliances based on filing requirements:
Filing of event-based compliances as required by the Companies Act.
ROC Compliance for Private Limited Company
Private limited companies must comply with ROC regulations. Failure to comply may result in penalties and legal ramifications for the company and its directors.
Legal Compliance Checklist for Start-ups
Operating as a private limited company requires adherence to annual filing requirements and compliance standards established by various laws and governing authorities. These include but are not limited to keeping approved books and accounts, hosting board meetings and other gatherings, submitting taxes, and filing financial statements regularly.
Benefits of Annual Compliance
Regular compliance enhances the credibility of the company, attracts more investors, retains the company's active status to avoid fines, and ensures legal standing. It also helps in attracting new clients, obtaining government contracts, and securing loan approvals.
Documents Required for Annual Filing of Company
Documents required for annual filing include PAN Card, Certificate of Incorporation, Audited Financial Statements, Board and Audit Reports, and DSC of Directors.
Cost of Annual Compliance for a Private Limited Company
The cost includes ROC fees, accounting and bookkeeping costs, statutory audit fees, filing fees, tax compliance costs, legal and professional fees, and other ancillary expenditures
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Penalty for Non-Compliances
Failure to comply with Companies Act guidelines may result in penalties and legal actions against the company and its members.
Ideal Compliance Partner
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