Private Limited Companies in India are governed by the Companies Act, 2013 under the Ministry of Corporate Affairs (MCA) and are required to undertake annual compliances which includes filing annual Tax Returns etc. All Private Limited Companies are subject to certain Mandatory Compliances which are essential for ensuring adherence to rules, regulations and applicable law, as enforceable from time to time as well as enables the Company to efficiently manage day to day affairs of the Company.
Every Private Limited Company is bound to discharge certain mandatory secretarial compliance filings or compliances as may be required by the Registrar of Companies (ROC) within the stipulated timeframe in order to avoid facing penalties. Following is a list / Checklist of Mandatory Compliances for a Private Limited Company:
- APPOINTMENT OF AN AUTDITOR: A Company must
appoint an auditor in the time span of 30 days from the date of
incorporation, who shall be required to finalise the accounts
annually. The Auditor may be appointed for a period of five years
and the appointment must be filed before RoC under the stipulated
format. The ROC is also to be informed in case a new auditor is
appointed by a company within 15 days from the date of the annual
- APPOINTMENT OF COMPANY SECRETARY: Under
Section 203 of the Companies Act, 2013, a Private Company having
paid up share capital of Rs. 5 crore more required to appoint whole
time Company Secretary.
- COMMENCEMENT OF BUSINESS CERTIFICATE: Every
Company incorporated in India after November, 2019 is required to
obtain a Commencement of Business Certificate within 180 days from
the date of incorporation. In case of failure to comply with the
same, the Company can attract a penalty of Rs 50,000 and even the
Directors of the Company may be held liable for Rs 1000.
- ANNUAL GENERAL MEETING: An Annual General
Meeting (AGM) is required to be conducted once a year by a
Company which shall be conducted at the registered office of the
Company within 6 months before the Financial Year ends. The
objective of conducting an AGM is to discuss and approve financial
statements, appointment of Arbitrator as well as other similar
matters. Notice of each AGM is required to be issued in terms of
Section 101 of the Companies Act, 2013 and Secretarial Standard
- BOARD MEETINGS: It is mandatory for every
Private Limited Company to conduct a Board Meeting within 30 days
from the date of incorporation. Altogether, there should be four
Board Meetings annually wherein at least 2 or one third of the
number of total Directors ought to be present. The Notice for the
above should be intimated at least 7 days prior regarding the
agenda of the meeting. Lastly, Minutes of the board meeting is to
be kept at the registered office of the company.
- MAINTENANCE OF STATUTORY REGISTERS:
Maintaining statutory registers, minutes of board meetings, AGM,
creditors meeting, debenture holder meetings are mandatory. A
Company will maintain all such Registers mandatory under the
Companies Act, 2013 including, inter alia, the Register of
Director, Register of Director Shareholding, Register of Members
and Register of Transfer.
- OTHER COMPLIANCES: In addition to the above-mentioned, a Private Limited Company is also required to adhere to some of non-ROC related compliances, including qua TDS/TCS payment, GST payment and GST filing, advance tax payment, filing of IT returns and tax audit reports.
Any business registered in India must mandatorily comply with the various legal requirements including, inter alia, as laid down above. In conclusion, as is evident from a perusal of the above checklist, it is clear that irrespective of the turnover or the capital amount it is imperative that the Company must comply with the annual mandatory compliance checklist.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.