Private Limited Compliances

Statutory Audit Compliances

The statutory audit compliances are carried to determine whether an organization provides accurate details of the financial position by examining the bank balances, bookkeeping records, and financial transactions.

• A statutory auditor of the company is appointed.
• The auditors of the company will finalize annual accounts.

Annual ROC Filings

The Private Limited Companies must file the annual accounts and returns disclosing the details of its shareholders, directors, etc., to the companies’ registrar.

As a part of the annual filing, the following forms are to be filed with the ROC:

Form MGT-7 (Annual returns) must be filed within 60 days of holding the annual general meeting.

Form AOC-4 (Financial statements) is to be filed by a private limited company within 30 days with the balance sheet and the statement of profit and loss account and Director report.

Annual General Meeting

It is necessary to hold a meeting of the shareholders once every year within six months from the financial year’s closing.

AGMs are held for approval of financial statements, declaration of dividends, appointment or re-appointment of auditors, commission, remuneration of directors, etc.

The meeting is held during business hours on a day that is not a public holiday. It shall occur at the registration of the company or the city, village, or town in which the registered office is situated.

Board Meeting

It is mandatory to conduct the first meeting of the Board of Directors of a company within 30 days of incorporation of the company.

There should be four board meetings held every three months in which a minimum of 2 directors or 1/3 rd of the total number of directors, whichever is greater, are required to be present.

Further, the meeting’s discussion needs to be drafted and recorded in the minutes of the meeting and maintained at the company’s registered office.

A notice should be intimidated seven days in advance about the date and the purpose of the meeting.

Directors Report

The Director has to disclose details about his directorship in other companies every year. This can be done by giving a declaration in writing to the company every year.

Income Tax Compliances

• Quarterly payment of the advance tax
• Filing of the Income Tax returns
• Tax audit (mandatory in case the turnover or gross receipts of a business exceeds Rs. One crore in the previous year relevant to the assessment year.
• Filing of the Tax Audit report.

1. Business Commencement Certificate

As a part of the annual compliance for private limited companies, it is mandatory to have a business commencement certificate within 180 days of company incorporation. This applies to companies registered after November 2019 and having a share capital.
Penalty for not following this annual compliance: If you fail to procure the certificate of commencement, the company will be subjected to a penalty of ₹50000 and the director should pay ₹1000 for each default day.

2. Appointing an Auditor

Within 30 days of incorporation, an auditor must be appointed as per the ROC compliance. The annual filing of a company should include all of this information.
Penalty for not following this annual compliance: Breaching this private limited company compliance results in a fine of ₹300 per month. Subsequently, the company will not be allowed to conduct business until they appoint an auditor.

A Private Limited Company is required to comply with the provisions of Companies Act, 2013 as well as all the Tax Laws like Income Tax Act, GST Act, PF Act etc. Any non compliances with respect to mandatory statutory provisions in any of the Acts will result in payment of heavy interest and penalties.

1. Penalty for Late Filing of Company Annual Returns with ROC: Every Company need to file its annual returns in form ACO-4 and MGT-7 annually irrespective of turnover or profit made by the Company. The penalty for late filing of Annual Returns is Rs. 100 per day for each day of delay for each form

2. Penalty for Late Filing of Income Tax Returns: Company ITR needs to be filed before 31st of October every year and in case of delay, it has time upto 31st of December to file delayed return with a penalty of Rs. 5000. Similaly, any delay in filing of Tax Audit reports will result in peanlties upto 0.5% of Turnover

3. Penalties for Late filing of GST Returns: Penalty for late filing of GSTR-3B is Rs. 50 for each day of delay

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