Introduction
Private Limited Companies in India are required to adhere to various compliance requirements under the Companies Act, 2013. These requirements ensure transparency, accountability, and good corporate governance. This comprehensive guide provides detailed information on the compliance requirements for Private Limited Companies, including annual filings, statutory obligations, and other legal requirements.
Annual Compliance Requirements
Private Limited Companies must comply with several annual requirements to maintain their legal standing and avoid penalties. Key annual compliance requirements include:
- Annual Return (Form MGT-7): The annual return provides details about the company’s directors, shareholders, registered office, and other relevant information. It must be filed within 60 days from the date of the Annual General Meeting (AGM).
- Financial Statements (Form AOC-4): Companies must file their balance sheet, profit and loss account, cash flow statement, and other financial documents within 30 days from the date of the AGM.
- Director’s Report: The director’s report includes information about the company’s financial performance, risk management policy, corporate social responsibility (CSR) activities, and other statutory disclosures. It is filed along with the financial statements.
- Income Tax Return (ITR): Companies must file their income tax return with the Income Tax Department by September 30th of the assessment year.
- Statutory Audit Report: The company’s financial statements must be audited by a qualified Chartered Accountant (CA), and the audit report must be filed with the Registrar of Companies (RoC).
Other Compliance Requirements
In addition to annual filings, Private Limited Companies must comply with other statutory requirements, including:
- Board Meetings: Conduct a minimum of four board meetings annually, with a maximum gap of 120 days between two meetings. Proper notice must be given, and minutes of the meetings must be recorded.
- Annual General Meeting (AGM): Hold an AGM within six months from the end of the financial year. The first AGM must be held within nine months from the end of the first financial year.
- Maintenance of Statutory Registers: Maintain statutory registers, including the Register of Members, Register of Directors, and Register of Charges, at the company’s registered office.
- Directors’ KYC: Directors must complete their KYC (Know Your Customer) verification annually through the DIR-3 KYC form.
- Compliance Certificate: Obtain a compliance certificate from a Company Secretary in practice if the company’s paid-up capital exceeds Rs. 10 crore.
- Form DPT-3: File a return of deposits or particulars of transactions not considered deposits by June 30th every year.
- Form MSME-1: File half-yearly returns with the RoC for outstanding payments to Micro or Small Enterprises (MSEs) if applicable.
- Form BEN-2: File a return of significant beneficial owners within 30 days of receiving the declaration in BEN-1.
Event-Based Compliance Requirements
Event-based compliance requirements are triggered by specific events or actions taken by the company. These include:
- Change in Directors: File Form DIR-12 with the RoC within 30 days of any appointment or resignation of directors.
- Change in Registered Office: File Form INC-22 with the RoC within 30 days of changing the registered office address.
- Allotment of Shares: File Form PAS-3 with the RoC within 15 days of the allotment of shares.
- Change in Share Capital: File Form SH-7 with the RoC within 30 days of any change in the share capital of the company.
- Creation or Modification of Charges: File Form CHG-1 with the RoC within 30 days of creating or modifying any charge on the company’s assets.
- Filing of Resolutions: File Form MGT-14 with the RoC within 30 days of passing certain board resolutions, such as the alteration of the Articles of Association (AoA) or borrowing money exceeding the company’s paid-up capital and free reserves.
Penalties for Non-Compliance
Non-compliance with the statutory requirements can result in severe penalties for Private Limited Companies, including:
- Monetary fines and penalties.
- Disqualification of directors.
- Legal actions and prosecution.
- Striking off the company’s name from the Register of Companies.
Conclusion
Adhering to compliance requirements is essential for the smooth operation and legal standing of Private Limited Companies in India. By understanding and fulfilling their statutory obligations under the Companies Act, 2013, companies can avoid penalties, maintain transparency, and build trust with stakeholders. Regularly updating and reviewing compliance practices ensures that the company remains compliant and well-governed, contributing to long-term success and sustainability.
