Although Private Limited Company is the most popular form of starting a business, there are various compliances which are required to be followed once your business is incorporated.
Managing the day-to-day operations of your private limited company along with complying the corporate laws can be little taxing for any entrepreneur. Hence, it is essential to take help of a professional and also understand the legal requirements to ensure timely fulfilment of compliances, without any levy of interest or penalty.
We have elaborated below some of the compliances which a private limited company has to mandatorily ensure:
| Compliance Requirement | Description | Timeline / Key Points |
| Appointment of Auditor | The first statutory auditor of the private limited company must be appointed after incorporation. Subsequent auditors can be appointed for a fixed term and the appointment must be filed with the Registrar of Companies. | First auditor: within 30 days of incorporation. Subsequent appointment: 5-year term, filed using Form ADT-1 with ROC. |
| Statutory Audit of Accounts | Every company must prepare its financial statements and have them audited by a Chartered Accountant. The auditor issues an Audit Report along with audited financial statements for regulatory filing. | Conducted annually at the end of the financial year before filing with ROC. |
| Filing of Annual Return (Form MGT-7) | The company must file an annual return containing details of shareholders, directors, and corporate structure with the Registrar of Companies. | Within 60 days of holding the AGM for the financial year 1 April – 31 March. |
| Filing of Financial Statements (Form AOC-4) | Companies must file audited financial statements including Balance Sheet, Profit & Loss Account, and Director’s Report with the ROC. | Within 30 days of holding the AGM. |
| Annual General Meeting (AGM) | Every company must hold a meeting of shareholders to approve financial statements, appoint/reappoint auditors, determine director remuneration, and address other company matters. The AGM must be held during business hours on a non-public holiday at the registered office or within the same city/town/village. | Must be held once every calendar year and within 6 months from the end of the financial year. |
| Board Meetings | The Board of Directors must meet periodically to review company operations and take strategic decisions. Proper notice must be given to directors and minutes of the meeting must be recorded and maintained. | First meeting: within 30 days of incorporation. Minimum 4 meetings per year (1 per quarter). Small Companies: minimum 2 meetings per year (one per half-year). Notice: at least 7 days in advance. Quorum: 2 directors or 1/3rd of total directors, whichever is higher. |
| Preparation of Director’s Report | The Board must prepare a Director’s Report summarizing the company’s financial performance, governance, and compliance activities during the financial year. | Prepared annually along with financial statements before filing with ROC. |
| Maintenance of Statutory Registers and Records | Companies must maintain statutory registers such as Register of Members, Register of Shares, Register of Directors, along with incorporation documents, board resolutions, and minutes of Board and AGM meetings. These records must be kept at the registered office and be available for inspection by members during business hours. | Books of accounts must be preserved for at least 8 financial years and maintained in good order at the registered office. |
| Income Tax Compliances | Companies must comply with tax regulations including quarterly advance tax payments, filing of annual income tax returns, and tax audit where applicable. | Corporate tax generally 25% plus applicable cess. Tax audit required when turnover exceeds ₹10 crore (subject to the 5% cash transaction condition). Tax audit report must be filed before the income tax return deadline. |
Other Event Based Compliances for a Private Limited Company in India
Besides Annual Filings, there are various other compliances which need to be done as and when any event takes place in the Private Limited Company. Instances of such events are:
- Change in Authorised Capital of the Company.
- Allotment of new shares or transfer of shares
- Appointment of Managing or whole time Director and payment of remuneration.
- Loans to and from Directors
- Opening or closing of bank accounts or change in signatories of Bank account.
- Change in Statutory Auditors of the Company.
Different forms are required to be filed with the Registrar for all such events within specified time periods. In case, the same is not done, additional fees or penalty might be levied. Hence, it is necessary that such compliances are met on time.
Non-Compliance
If a Private Limited Company fails to comply with the rules and regulations of the Companies Act, then the Company and every officer who is in default shall be punishable with fine for the period for which default continues.
If there is delay in any filing, then additional fees is required to be paid, which keeps on increasing as the time period of non-compliance increases.
VenturEasy will be pleased to help you with mandatory compliances and annual filing for your Private Limited Company. Get in touch with us at [email protected] or sign up at ventureasy.com/Company-Annual-Filing
For any questions/ requirements, please email at [email protected]
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It’s really good to read. Pointed everything in a clear manner. Request you to update the same as and when the amendments are made in Companies Act becoz lot of pages won’t do it.
Thanks
A good article for a fresher. I am a fresher and want to convert my small Healthcare business to a Pvt Ltd Company.
I want to know what are the advantages and disadvantages of running a Pvt Ltd Concern, rather than a Partnership or a sole proprietory firm.
Hey Nikita,
Very elaborated explanation given on compliances for Pvt Ltd Companies.
Looking forward to receiving more updates.
Cheers
Sapna Kapur
CMA
Hello Nikita Madam
Great article , Great explanation