Mandatory Annual Compliance for Private Limited Company | Ebizfiling

 Introduction

 

A private limited company incorporated in India must ensure that the requirements of the Companies Act, 2013 are met. The Companies Act of 2013 governs the appointment, qualification, remuneration, and retirement of directors, as well as other aspects such as board meetings and shareholder meetings. RoC compliance is required for registered Private Limited Companies. The company must comply with the annual compliance requirement regardless of its total turnover or capital amount. Today's article will go over the annual compliance for Private Limited Companies.

 

Advantages of annual compliance filing for Private Limited Company

 

Below are the 3 main advantages of annual compliance filing for Private Limited Company:

 

• Increase the number of investors

 

Financial records and compliances are the primary focus points for investors. Before investing in any company, investors investigate the consistency with which annual returns are filed on the MCA portal. Investors are always inclined to favour companies that maintain consistent compliance. Thus, for a private company to attract more investors, annual compliance for Private Limited Company must be filed on a regular basis.

 

• Maintaining a company's active status and avoiding penalties

 

To avoid penalties, it is critical for a private company to file annual compliances on a regular basis. Failure to file the annual compliance can also jeopardize the company's financial standing. The company may also be declared inactive or removed from the ROC. The directors in question are also barred from being appointed again. Therefore it is necessary to file annual compliance on time or before the due date of filing the compliance of a company.

 

• Increased Company Credibility

 

Compliance with the law is a fundamental requirement for any company. The MCA (Ministry of Corporate Affairs) portal displays the date of the company's annual return filing. Regularity in compliance is an important criterion for measuring a company's credibility when it comes to government tenders, loan approval, or other purposes. Regular compliance also boosts the company's credibility, attracts more customers, and aids in obtaining government tenders and loan approval.

 

Mandatory Annual Compliance for Private Limited Company

 

Some of the mandatory compliances that a private Limited company must ensure are as follows:

 

• Statutory Audit Compliance

 

At the end of the fiscal year, every company must prepare its accounts and have them audited by a Chartered Accountant or another appropriate person. The Auditor should provide the Registrar with an Audit Report as well as the Audited Financial Statements. Ebizfiling will assist you in meeting all of the annual filing requirements for Statutory Audit reports.

 

• Annual General Meeting (AGM)

 

Every company is required to hold an Annual General Meeting during working hours on or before September 30th of each year. On a day that is not a general public holiday, and either at the company's certified office within the city, town, or village where the certified office is located. It is necessary to provide a 21-day notice for the same.

 

• Form AOC - 4

 

Every private Limited Company is required to file its 'Balance Sheet' in this Form, along with a statement of 'Profit and Loss Account' and 'Director Report' within 30 days of holding its 'Annual General Meeting.'

 

• Subsequent Auditor

 

In the first Annual General Meeting of the Company, the Board of Directors shall delegate the Auditor, who shall hold the position until the sixth Annual General Meeting, and notify the same ROC by filing ADT-1. The time period to submit Form ADT 1 is within 15 days of appointment of an auditor.

 

• Income Tax Return Filing

 

Amounts paid as advance tax and withheld in the form of TDS or collected in the form of TCS will take the character of your tax due only on completion of self-assessment of your income. All companies registered in India are required to file income tax returns each year on or before September 30th.

 

• Income Tax Audit

 

Under Section 44AB of the Income Tax Act of 1961, the Income Tax Department has made provisions for tax audits. Regardless of annual turnover, all companies, whether private limited companies or sole proprietorships, must have tax audits performed. Ebizfiling accounting firm will handle this for you.

 

• Form MGT - 7

 

ROC Form MGT 7 includes information on the shareholding structure, changes in directorship, and any share transfers during the fiscal year The due date for ROC Form MGT 7 is November 28th, which is 60 days after the conclusion of the AGM (Annual General Meeting).

 

Bottom Line

 

There are some event-based compliances that must be filed, aside from the mandatory compliances. A Private Limited Company is required to file all compliances within the time frame specified by MCA. Non-filing of Annual returns entail hefty penalties. These are over and above normal fees charged by MCA and there is no way to reduce the penalties.

 

 

 

 

Author's Note

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