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If you are a business registered in India, then you must know about the various mandatory compliance for private limited company listed by the corporate laws such as the Companies Act, 2013 and comply with them. Since many startups are registered as companies, annual compliance for Private Limited Company becomes happens to be an issue that most growing companies want to know about.
A private limited company is a form or limited liability form of ownership. Some of the unique features of private limited company that makes it popular are its limited liability of the shareholders, separate legal entities, ability to raise equity funds and perpetual succession. It is the most recommended type of entity for small and medium size businesses, that are family owned or professionally managed.
What are the Compliances for Private Limited Company?
The compliance requirements for a private Limited company have changed drastically over the years.
The statutory compliances for a private company under companies act 2013 are-
1. Commencement of business
For Companies registered in India after November 2019, with a share capital, obtaining the commencement of business certificate within 180 days of incorporation of the company is mandatory.
Failing this will result in a penalty of Rs.50000 for the company and Rs.1000 per day for directors for each day in case of default.
2. Auditor Appointment
ADT-1- A statutory auditor must be appointed by all Indian registered companies within 30 days of incorporation. In case the company does not appoint one, they will not be allowed to run their business and will also incur a penalty of Rs. 300 per month.
3. Board meeting
A private limited company is required to hold a board meeting within the first 30 days of incorporation. The discussion points must include-
- Bank account opening to deposit share capital amount received from shareholders.
- Issue of share certificates – Form SH-1 signed by a director and Company secretary.
- Other related matters.
4. Obtainment of Registration under different laws if needed.
A private limited company must obtain registration and licences under different laws if necessary. Examples
- GST Registration
- Import Export Code
- MSME (Micro, Small and Medium Enterprises) Registration
- FSSAI Registration
- Trademark registration
- Startup India Registration
- ISO Certification
ROC Compliance for Private Limited Company
Coming to an especially important question that is most frequently asked- Is ROC filing mandatory for Pvt Ltd Company?
Yes, ROC compliance for private limited company is mandatory. Non-compliance with ROC filing requirements can result in penalties and legal consequences for the company and its directors.
Therefore, private limited companies must ensure timely and accurate filing of all required documents and forms with the Registrar of Companies to maintain good standing and comply with legal obligations.
Legal Compliance Checklist for Private Limited Company
In adherence to the Compliances for private limited company under companies Act 2013, there are several forms and returns to be filed on an annual basis. Th Income Tax Act 1961 is applicable, and all private limited companies must comply with the Act.
Here is the list of Compliances for Private limited company in India
| S. No | Form Purpose | Form No | Notice period/Due date |
|---|---|---|---|
| 1. | Annual financial Statements– If paid up share capital>5 crores /turnover>100 crores, financial statements are to be filed in XBRL Format | AOC-4 | Within 30 days of the annual general meeting |
| 2. | Annual Returns- If paid up share capital>10/ turnover>50 crores, the Pvt ltd company must obtain a certificate from practising company secretary in form MGT-8 | MGT-7A (small companies and OPC), MGT-7 (others) | Within 60 days or before due date of Annual General meeting held. |
| 3. | Disclosure of Interest by the Director to the Company | MBP-1 | First Board meeting of every Financial Year |
| 4. | Disclosure of Non-Disqualification by the Director to the Company | DIR-8 | First Board meeting of every Financial Year |
| 5. | Director KYC | DIR-3 KYC | 30Th September of every year |
| 6. | Deposit Returns | DPT-3 | 30th June of every year |
| 7. | Reappointment/ Casual Vacancy of Auditor | ADT-1 | In case of Reappointment or Causal vacancy within 15 days of the Annual General Meeting held or Extrairdinary general meeting, within which a new auditor is appointed. |
| 8. | Unpaid and Unclaimed Accounts Statements | IEPF-2 | Within 60 days or before due date of Annual General meeting held. |
| 9. | Disclosing the Beneficial Owner | BEN-2 | Within 30 days of receiving the BEN-1 from the shareholder. |
| 10. | Pending Payments to Vendors if it is an MSME | MSME-1 | Follows half yearly return. Due dates for-
1st April to 30th Sep is 30th Oct 1st Oct to 31st Mar is 30th Apr |
| 11. | Appointment and Resignation of Directors- changes in the board of directors, such as appointments, resignations, or changes in director details, must be filed within specified time | DIR-12 | Not applicable |
| 12. | Allotment of Shares- On issuance of new shares, whether for raising capital or other purposes, the details of the allotment must be filed | PAS- 3 | Not applicable |
| 13. | AGM- required to file a notice of the Annual General Meeting (AGM) with the ROC | 21 days before the Annual General Meeting |
What is the Cost of Annual Compliance for Private Limited Company?
Mandatory annual company compliance charges ₹10,999 for startup companies.
Having said that, the cost of annual compliance for a private limited company in India can vary based on factors such as the company’s size, activities, location, and the services you choose to handle the compliance process.
Proper budgeting and planning for annual compliance expenses are important to ensure that your private limited company remains in good standing and meets all regulatory obligations.
Where to Find the Perfect Compliance Partner for the Business?
Finding the perfect compliance partner for your business is a critical decision that can have a significant impact on your company’s success and legal standing.
Alp Consulting’s expertise and experience and our capabilities to develop customized solutions to our makes us the perfect compliance partner for your business.
FAQ- Frequently Asked Questions
1. What is ROC compliance in a company?
ROC compliance for a private limited company refers to the various legal and regulatory requirements that the company must fulfil and report to the Registrar of Companies (ROC).
ROC is a government agency responsible for regulating and maintaining records related to companies registered in India. These compliance activities are mandated under the Companies Act, 2013, and other relevant laws. ROC compliance is essential to ensure the legal and operational integrity of the company and to maintain its good standing with the regulatory authorities.
2. How much does ROC compliance cost?
The cost of ROC (Registrar of Companies) compliance for a private limited company in India can vary based on several factors, including the size of the company, the scope of compliance activities, the complexity of operations, and the specific services you choose to handle the compliance process. The general pricing starts from Rs.4000.
3. Is it mandatory to get a Private Limited Company audited?
Yes, it is mandatory for a Private Limited Company in India to get its financial statements audited by a qualified Chartered Accountant (CA) each fiscal year. This requirement is outlined in the Companies Act, 2013, and applies to all private limited companies, regardless of their size or turnover. The audit ensures transparency, accuracy, and compliance with financial reporting standards.
4. Can I run a small business without registering?
You can operate a small business without formally registering a legal entity, such as a company or corporation. It is often called a sole proprietorship. However, you need to consider certain legal implications associated with it like legal identity, liability, Tax implications, Lack of credibility, Limited growth, Registration requirements etc.
5. Is it necessary to conduct AGM?
Yes, it is necessary for companies, including private limited companies, to conduct Annual General Meetings (AGMs) as mandated by the Companies Act, 2013 in India. It provides a platform for shareholders and management to discuss important matters related to the company’s performance, financial position, and future direction.
