Overview of Annual Compliance for Private Company

 

 

A Private Company is a legal institute enjoying a separate personality which requires controlling its active status through the regular filing with MCA. For every business, it is compulsory to file an annual return and audited financial reports with MCA for every fiscal year. The RoC filing is necessary irrespective of the turnover, whether it is zero or in crore. Whether a single business is undertaken or none, annual compliances for private limited are compulsory for every certified company.

Both the forms are applied to report the activities and financial date for concerned Financial Year. The due terms for annual filing of a company are based on the time of the Annual General Meeting. The perpetual failure may lead to the elimination of the company’s name from RoC’s register, including incompetence of directors. Also, it has been noticed that MCA has actively taken bold measures for dealing with any such failures. The compliances relevant to the company could be segregated into two sections Mandatory Compliances and Event-Based Compliances.

 

 

 

Mandatory Annual Compliances

 

 

We have developed some of the mandatory agreements that a private Limited company must ensure:

• Subsequent Board Meetings:Minimum of 4 Board Meetings to be checked every year with not more than 120 days gap within two meetings.
• Filing Of Acknowledgement Of Interest By Directors:
  Every director at:
  1. The first meeting in which he engages as director; or
  2. The first meeting of Board in each FY; or
  3. Whenever there is a variety in disclosures shall reveal in Form MBP 1 (along with a list of relatives and attention of relatives in the Company as per RPT definition), his interest or interest in any company, body corporate, organizers/firms or other organization of individuals (including shareholding interest). Form MBP-1 shall be kept in the documents of the Company.
• Subsequent Auditor: The BOD shall delegate the Auditor Auditor in first AGM of Company who shall hold the position till the conclusion of 6th AGM and shall notify the same to ROC by filing ADT-1. The capacity to submit Form ADT 1 is that of the Company and not of the Auditor Auditor within 15 days from the time of appointment
• Annual General Meeting: The BOD shall delegate the Auditor Auditor in first AGM of Company who shall hold the position till the conclusion of 6th AGM and shall notify the same to ROC by filing ADT-1. The capacity to submit Form ADT 1 is that of the Company and not of the Auditor Auditor within 15 days from the time of appointment.
• Filing Of Annual Return (Form MGT-7): Each and every Private Limited Company is expected to file its Annual Return within 60 days of operating of Annual General Meeting. Annual Return will be for the time' 1st April to 31st March'.
• Filing Of Financial Statements In (Form AOC-4): Each and every private Limited Company is expected to file its 'Balance Sheet' along with a statement of 'Profit and Loss Account' and 'Director Report' in this Form in 30 days of holding of 'Annual General Meeting'.

 

 

 

Event-Based Compliances

 

 

Even based compliances are those who get triggered upon following of certain events like change in directors, change of registered office, change in approved share capital etc. Hence, it is essential that the happening of such events get tracked, and docility met with on time to avoid penalties or additional fees. Some of the Event-based agreements are mentioned below, along with the time limit:

 

Actions	Form No.	Phase Limit
Change in registered office	INC-22	Within fifteen days from the date of such change
Change in Directors or KMP	DIR-12	Within 30 Days of such change
Increase in Authorized Share capital	SH-7	Within 30 days of passing Ordinary Resolution
Filing of resolution and agreements	MGT-14	Within 30 days from date of passing resolution
Increase in Paid up share capital (Issue of security)	PAS-3	Within fifteen days from the date of the allotment
Change in secured borrowing (Creation, modification and satisfaction of charge)	CHG-1	All types of Charges within 30 days of its creation
Application for KYC of Directors	DIR-3 KYC	On or before 30th April of immediate next Financial Year (Annual Compliance)
ACTIVE (Active Company Tagging Identities and Verification)	INC-22A	On or before 25th April 2019 (Applicable to all companies registered before 31st December 2017)
Declaration of Commencement of Business	INC-20A	Within a period of 180 days of the date of incorporation of the company. (Applicable to companies incorporated after 2nd November, 2018.)

 

 

Essentials	Form No.	Phase Limit
Change in registered office	INC-22	Within fifteen days from the date of such change
Increase in Authorized Share capital	SH-7	Within 30 days of passing OR
Increase in Paid up share capital (Issue of security)	PAS-3	Within fifteen days from the date of the allotment
Change in registered office	INC-22	Within fifteen days from the date of such change
Change in secured borrowing (Creation, modification and satisfaction of charge)	CHG-1	All types of Charges within 30 days of its creation
Change of name of company	INC-27
Filing of resolution and agreements	MGT-14	Within 30 days from date of passing resolution
Removal of Auditor before Expiry	ADT-2	Within 30 days from date of passing SR
Application for KYC of Directors	DIR-3 KYC	On or before 30th April of immediate next Financial Year (Annual Compliance)
Report for Disqualification of the Director	DIR-9	To be filed by company within 30 days of such disqualification

 

 

 

 

Stipulations of Non-Compliances

 

 

If a company declines to follow any of the administrative compliances, then the Company and every officer who is in arrears shall be guilty with a fine for the period for which default remains. Hence the penalties will keep on escalating as the period of non-compliance increases.

 

 

 

Benefits of Annual Compliance

 

 

• Establishing A Company’s Credibility: Compliance of law is the fundamental requirement for any company—the date of the company’s annual return filing performed on the Master Data on the MCA portal. Ministry tenders, loan support or for similar other purposes, the consistency in compliance is an important criterion to measure the reliability of an organization.
• Invite Investors: While attracting funds for a corporation from the investors, the investors demand all financial histories and date before settling the proposal. The investors may either request the company directly or can also check the economic reports from the MCA portal. Investors also lead to favour companies with regular compliance reports.
• Maintain Active State And Avoid Punishments: Constant failure in filing the return turns the company status to failure and charges it with heavy penalties. The company may also be disclosed as defunct or removed from the RoC. The concerned directors are also excluded and debarred from their further appointment. Since July 2018, a supplementary fee of Rs.100 for each day of delay has been levied till the date of filing.

 

 

 

Latest: Checklist of Annual Compliance for Private Startups

 

 

A startup working as a private limited company has to follow characters of compliance as laid down by different statutes and other administrative bodies. These include but are not restricted only to the periodic filing of tax and other returns, accommodating the board and other meetings, maintaining sanctioned books and accounts etc.

• • • • • • • • • • • • Payment of periodic dues: GST Liability, TDS & TCS mandatory payment
                      • Non-Registrar compliance of periodic returns – (Monthly, quarterly, annual returns- GST, TDS, etc)
                      • Monthly/Quarterly- GST Returns
                      • Quarterly-TDS Returns
                      • Evaluation of advance tax liability and payment of advance tax periodically
                      • Filing of Income Tax Returns (Tax will be obligatory at a flat rate of 30% plus Education Cess)
                      • Filing of Tax Audit Report
                      • Administrative Assessment of trade under different acts of law (Eg. Environment and Protection Act, Money Laundering Act, Competition Act, Factory Act etc.)

 

 

 

 

Documents Required for Annual Filing of Company

 

• Incorporation Certificate
• Audited Financial Statements
• An independent auditor must audit financial Statements
• Audit Report & Board Report
• Independent auditor’s report and Board report must be concerned
• DSC of Director
• Accurate and active DSC of one of the directors must be provided and presented

 

 

 

Procedure for Private Limited Company Annual Compliance and Filling

 

 

• Monitrix obtained your request for Private Limited Company compliance
• We will assign a skilled resource who is professionally equiped in business compliance. The allotted resource support you to manage the compliance for your Private Limited Company. You can get in touch with the authorised resource at any point of time for deliberation and assistance concerning compliance throughout your journey with Professional Utilities.
• Our support will help your Private Limited Company to maintain statements and prepare the financial report for each year.
• Our support will collect all the required documents/erudition and will complete all below designated compliance activities for your Private Limited Company.

1. 1. 1. Manage Accounts and Make financial statements
      2. Annual returns
      3. Annual General Meeting
      4. Board meetings
      5. Annual Filing of Forms
      6. Yearly Forms by Directors

• Our support will collect all the needed documents/information and file your Private Limited Company income tax return with ROC (Registrar of Companies) along with the necessary documents after getting final approval from your finance team if required.
• Our support will draft minutes of meetings, announcements and will also manage the statutory register.
• Preceding seven steps completes your Private Limited Company compliance under Companies Act 2013.

 

 

Conclusion

 

A Private Company is a legal institute enjoying a separate personality which requires controlling its active status through the regular filing with MCA. For every business, it is compulsory to file an annual return and audited financial reports with MCA for every fiscal year. The RoC filing is necessary irrespective of the turnover, whether it is zero or in crore. Whether a single business is undertaken or none, annual compliances for private limited are compulsory for every certified company.

Both the forms are applied to report the activities and financial date for concerned Financial Year. The due terms for annual filing of a company are based on the time of the Annual General Meeting. The perpetual failure may lead to the elimination of the company’s name from RoC’s register, including incompetence of directors. Also, it has been noticed that MCA has actively taken bold measures for dealing with any such failures. The compliances relevant to the company could be segregated into two sections Mandatory Compliances and Event-Based Compliances.