Essential Compliances For Pvt Ltd Companies

What Does Compliance Mean for a Private Limited Company?

Compliance is like a checklist every Private Limited Company must tick off to stay legally active and credible. These activities ensure your business stays legally sound and government-verified. Here’s what it covers:

• Annual ROC Filings: Submission of forms like AOC-4 and MGT-7 to report financials and company details.
• Board Meetings & AGM: Conducting meetings as required under the Companies Act to maintain transparency.
• Tax Returns: Filing of Income Tax Return (ITR-6), TDS returns, and advance tax payments.
• Statutory Registers: Maintaining updated records of shareholders, directors, and share transfers.
• Event-Based Filings: Compliances triggered by specific events like change in directors or capital.

These compliances are mandatory and help your business avoid penalties, legal delays, or disqualification issues.

Mandatory Annual Compliances under Companies Act, 2013

Every Private Limited Company registered in India must follow specific annual compliances as per the Companies Act, 2013. These are not optional, they are mandatory filings that help the Ministry of Corporate Affairs (MCA) monitor corporate governance. Non-compliance may result in financial penalties or even disqualification of directors.

Here’s what needs to be done each year:

• Form AOC-4: Filing of audited financial statements within 30 days of AGM
• Form MGT-7: Filing of annual return with shareholding and company details within 60 days of AGM
• Board Meetings: At least 4 per year (one in each quarter), with proper minutes and attendance
• Annual General Meeting (AGM): Must be held within 6 months of the end of financial year
• Director Disclosures (MBP-1 & DIR-8): Annual declaration of interest and non-disqualification
• Statutory Registers: Maintenance of registers for directors, members, share allotments, etc.

Following these filings keeps the company active and reduces the risk of strike-off by ROC.

Income Tax Compliances for Pvt Ltd Company

Income tax compliance for Private Limited Companies isn’t just about filing a return; it’s a system of quarterly and annual responsibilities.

• Filing of Income Tax Return (ITR-6): All companies, other than those claiming exemption under Section 11, must file ITR-6 annually. This form reports the company’s income, profits, and taxes paid.
• Tax Audit under Section 44AB (if applicable): If the company’s turnover exceeds ₹1 crore (or ₹10 crore in some digital transactions), a tax audit by a Chartered Accountant is mandatory. The audit report must be submitted along with Form 3CD.
• Advance Tax Payment: Companies must pay income tax in installments throughout the financial year if the tax liability exceeds ₹10,000. Payments are to be made quarterly in June, September, December, and March.
• TDS Deduction and Filing of TDS Returns: Pvt Ltd companies must deduct Tax Deducted at Source (TDS) on salaries, payments to contractors, rent, interest, etc., and deposit it with the government. Quarterly TDS returns in Form 26Q/24Q must be filed on time.
• Form 16 & 16A Issuance: After filing TDS returns, companies must issue Form 16 (for employees) and Form 16A (for vendors) as proof of tax deduction. This must be done every quarter or annually as applicable.
• Form 3CA/3CB & 3CD Filing: These forms are applicable during tax audit and must be certified by a CA. They detail the company’s financial statements, tax adjustments, and compliance status.
• PAN and TAN Compliance: Having a valid PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) is compulsory. PAN is needed for income tax filings, while TAN is required for all TDS-related activities.

GST Compliance (if registered) for Pvt Ltd Company

GST law imposes routine filing and record-keeping duties on Private Limited Companies. Missing even one can cause ITC blockage or penal action. Here’s what you must comply with:

• GSTR-1- Report Your Sales: This return shows all the sales you’ve made during the month or quarter. Your buyers use this to claim GST credit.
• GSTR-3B – Summary of Tax Payable: This is a simple form where you tell the government how much GST you’ve collected, how much ITC you’re using, and how much you’re paying.
• Annual GST Return – GSTR-9: If your yearly turnover is more than ₹2 crore, you must file this once a year. It combines all your GST data for the year.
• Paying GST on Time: Every month, you must pay GST based on sales minus ITC. Even if your GST is zero, you still need to file the return on time.
• Matching Purchase Invoices (ITC Reconciliation): To claim GST credit on purchases, make sure your suppliers have filed their returns correctly.
• E-Invoicing (for large businesses): If your sales are over ₹5 crore, you need to generate e-invoices through the government portal before sending them to clients.
• E-Way Bills (for goods transport): If you move goods worth over ₹50,000, you must generate an e-way bill online before dispatching them.

Registrar of Companies (ROC) Filings for Pvt ltd compnay

Every Private Limited Company has to tell the government what it’s doing each year, and that’s called ROC filing. It’s like updating your company’s report card.

• AOC-4: Share your company’s financials:This form includes your income, expenses, profit/loss, and audit report. File it within 30 days after your AGM.
• MGT-7 / MGT-7A: Share your company’s basic details:This form includes details like owners, directors, and changes in your company. Small companies can use MGT-7A (shorter version).
• ADT-1: Tell who your auditor is:After you appoint an auditor (the person who checks your finances), let ROC know using this form.
• DIR-3 KYC: Confirm your director’s mobile number & email:Every director must verify their contact details once a year.
• DPT-3: Report if you’ve taken any loan:Even if your company took a loan from a director or friend, report it using this form.
• MSME-1: If you delay payments to small vendors:If you don’t pay small businesses within 45 days, you must tell ROC by filing this.

Statutory Audit & Auditor Appointment

If you have a Private Limited Company, you need someone to review your accounts every year officially. That’s where a Statutory Audit comes in.

• Step 1: Understand What a Statutory Audit Is: It’s a legal check of your financial records, done by a qualified Chartered Accountant, as per Section 139 of the Companies Act, 2013.
• Step 2: Appoint an Auditor: Your company must appoint an auditor in the first board meeting (within 30 days of registration). Their job is to audit your books annually.
• Step 3: File Form ADT-1: Once you’ve appointed the auditor in the AGM, file this form with the ROC within 15 days to inform the government officially.
• Step 4: Conduct the Audit: The CA checks your records, verifies compliance, and prepares an audit report, which is then filed with AOC-4.
• Step 5: Re-appoint if Needed: After the first term (usually 5 years), the company can reappoint the same auditor with shareholder approval.

Labor Law Compliances (if applicable)

Labour law compliance is all about taking care of your team legally. If your company hires people, here’s what you must do:

• Step 1: Register for EPF (If 20+ employees): Both you and your employee must contribute a small % of salary into Provident Fund.
• Step 2: Register for ESI (If 10+ employees earning under ₹21,000): This gives employees access to medical care and insurance.
• Step 3: Check the Shops & Establishments Act (Varies by state): Most states require every company (even IT firms) to register here; it’s a basic employee protection law.
• Step 4: Pay Wages as per Law: Pay salaries on time, give payslips, and don’t pay less than the notified minimum wages.
• Step 5: Maintain Records: You must keep registers of wages, overtime, leave, etc., either in soft or physical form.

Labour law compliance isn’t just about paperwork – it protects your team and keeps your company out of trouble.

Event-Based Compliance for Pvt ltd company

Apart from yearly filings, your company must also file with ROC whenever certain events or changes happen. These are called Event-Based Compliances.

• Appointment or Resignation of a Director: If any director joins, resigns, or changes their details (like address), you must file Form DIR-12 with ROC within 30 days. This keeps your company’s board records updated.
• Change in Registered Office Address: Whether you shift to a different floor, city, or state, such changes must be reported in Form INC-22. This is required so all legal communication reaches the right place.
• Issuing or Transferring Shares: If you bring in investors or issue bonus shares, file Form PAS-3 within 15 days of allotment. It records changes in shareholding structure with MCA.
• Change in Business Activity or Company Name: If you modify your company’s business objects or name, it impacts your Memorandum of Association (MOA). You must file Form MGT-14 after passing a board/shareholder resolution.
• Auditor Change Before Term Ends: Auditors are usually appointed for 5 years. If you remove or replace them before that, you must take NCLT’s approval and file Form ADT-2 with valid reasoning.
• Taking a Loan or Creating a Charge: If your company takes a loan and gives assets as security, you must register that with ROC by filing Form CHG-1 or CHG-9 within 30 days. This protects both your lender and your company.

Penalties For Non-Compliance

Missing key compliance deadlines can lead to serious legal troubles. Here’s what you could face if you miss your compliance obligations:

• Late Filing of ROC Returns (MGT-7, AOC-4): ₹100 per day, per form — no upper limit until filed. Can go up to lakhs.
• Non-Holding of AGM: Penalty up to ₹1 lakh + ₹5,000/day for continued default (Section 99, Companies Act).
• Delayed Auditor Appointment Filing (ADT-1): Late fees and company may be marked non-compliant; directors can also be fined.
• TDS Non-Filing / Late Deduction: Penalty under Section 271H: ₹10,000 to ₹1 lakh + interest on delayed payment.
• Late Income Tax Return (ITR) Filing: ₹5,000 late fee (₹1,000 if total income < ₹5 lakh) + interest + scrutiny risk.
• GST Non-Filing (GSTR-1, GSTR-3B): ₹50/day (₹20/day for nil returns) + interest @18% + possible suspension of GSTIN.
• Non-Compliance with Labour Laws (PF/ESI): Penalties vary from ₹5,000 to ₹1 lakh + prosecution in severe cases.

Conclusion

Staying compliant is key to running a smooth and penalty-free business. Regular filings help maintain your company’s legal standing. EbizFiling makes the entire compliance process easier with timely filings and expert support.

Suggested Read :

Monthly Compliance for Pvt Ltd Company

Appoint a Director in a Pvt Ltd Company

Employee Structure of a Pvt Ltd Company

Checklist for Pvt Ltd Company Compliance

Director Appointment in Pvt Ltd Company

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