List of Compliances for Private Limited Company
Introduction
If you’re registering a Pvt ltd business in India, knowing the mandatory compliances for Pvt ltd Company is important. Annual compliance ensures the company follows government rules, improves efficiency, and supports business growth.
What is a private limited company?
A small group of shareholders owns a private limited company, a business structure commonly used by SMEs. It provides legal recognition, flexibility, and limited liability. Unlike public companies, private companies hold their shares privately and do not trade them on stock exchanges. They restrict share transfers and must have at least two but no more than 200 shareholders.
List of Compliances for Private Limited Company
When a company registers its business in India, it also introduces an important concept of compliance. Simply, a compliance for a Pvt. Ltd. company refers to the adherence to a set of rules and regulations. There are mainly three types of compliance that are important to know.
- Annual compliances
- Event based compliances
- Tax related companies.
Annual Compliance
Annual compliance covers several things. Below is a summarized list of compliances for a Private Limited Company.
- Filing DPT -3 for return of deposits before 30th June of every year.
- Filing MSME form 1.
- Filing AOC -4 for annual financial statements within the six months of financial year end.
- Filing MGT-7 / MGT 7A for annual return.
- Holding a Board Meeting during a financial year. there should be 4 meetings at least in a calendar year with a gap of not more than 120 days between two meetings.
- If you are applicable to file a tax audit report, you need to file that as well.
- Renewal of licenses and permits.
- Appointment of auditor and filing of E-form ADT-1.
- DIR- 3 KYC for Director KYC submission.
- Maintenance of statutory registers.
Annual General Meeting
Companies must hold the Annual General Meeting (AGM) within six months from the end of the financial year. Pvt Ltd Companies must conduct an AGM at least once a year.
- In this meeting, shareholders get an approval of financial statements.
- AGM allows shareholders to vote for the declaration of dividends.
- By this meeting, the Company can appoint or reappoint auditors.
Annual ROC filings
Each year, Pvt ltd Companies in India must file their annual returns and accounts with the Registrar Of Companies (ROC). The documents mention several important details about the company’s shareholders and directors.
Major two forms need to be filed for ROC filings;
- Form MGT 7: This form is for annual returns of the company. It contains the details about the company’s directors, shareholders, and other relevant details. It needs to be filed within the 60 days of the Annual General Meeting.
- Form AOC 4: This form is for financial statements of the company. It includes the information of the Balance sheet, profit and loss account, and a director’s report of the company. It needs to be filed with the ROC within 30 days of the Annual General Meeting.
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Event Based Compliance
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Change in Registered office: Have to file INC-22 form within 15 days from the date of change.
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Change in Directors or KMP: Within 30 days of such change, company has to file DIR-12 form.
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Change in paid-up share capital: In this case, the Company has to file SH-7 form within 30 days of passing an ordinary resolution.
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Allotment of shares: Company has to file PAS-3 form within 15 days from the date of allotment.
Tax Related Compliance
Advance tax payment and calculation
If a company wants to avoid a year end crunch, they can pre pay a portion of their annual tax liability via advance tax installments.
The calculation of your advance tax includes applying the relevant tax rate and taxable income of the financial year.
- These need to be paid on a quarterly basis.
- If a company fails to pay before the due date, then they have to pay the penalty of 1% monthly interest on the unpaid amount.
Income tax returns
- All private limited companies must file income tax returns each year, ensuring timely tax contributions and transparency.
- This needs to be filed on or before September 30th of the financial year.
- Minimum penalty of not filing ITR (Income Tax Return) is ₹ 10,000 and Maximum is ₹ 1,00,000.
GST filing (If Applicable)
- The returns are totally dependent on the company’s turnover.
- Company needs to file GSTR- 9 for the annual GST return for the financial year.
- If a business or company follows the business turnover of 2 crores and above, then they compulsory have to file GSTR- 9C for Reconciliation Statement.
TDS Filing
- If the company is making payments like salaries, rents, or professional fees then they needs to file TDS (Tax Deducted at Source) and TCS (Tax Collected Source).
- It is mandatory for company to file TDS/TCS if they deduct tax during financial year.
Consequences of Non-compliance.
It is important for you to be aware of the consequences of non compliance. It can lead your company to pay the penalties. Moreover, your company can face Reputational damage and operational disruptions.
Companies must prioritize compliance in order to avoid such fines or other losses. If you fail to comply with tax, then you have to face such a consequence as below;
- Heavy penalties and fines
- Interest on unpaid taxes
- Reputational damage
- Loss of public trust
- operational disruptions.
Conclusion
At last, You must know the importance of compliance before registering your company as a pvt ltd company in India. It is a crucial part of the business as it is attached to the reputation and growth of the business. To know the deep information about the compliance, you must take advice from an expert.
Suggested Read :
Executive and Non-Executive Director
Monthly Compliance for Pvt Ltd Companies
Responsibility of Director in Pvt Ltd Company
FAQ
1. What are two types of compliance?
There are two major types of compliance; External compliance and internal compliance.
2. What are the types of Private Limited Company?
There are three types of Pvt Ltd Company: Company limited by shares, Company limited by guarantee, and Unlimited Company.
3. Why is compliance important?
It is essential for all registered companies to follow the rules which are set by ROC. In case of failure, the Company has to pay heavy fines and also a chance of reputation damage.
4. What is essential for a Pvt Ltd Company?
For each private limited company, It is mandatory to file balance sheet along with the statement of profit and loss account within 30 days of AGM.
5. Is ROC filing compulsory for a Private Limited Company?
Yes, ROC filing is a legal requirement which needs to be fulfilled on specified time period.
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