Annual Compliances

Compliance refers to the capacity to follow directives, guidelines, or demands. A private limited company that was established in India has to make sure that all requirements set forth by the Companies Act of 2013 are satisfied.

The appointment, qualifications, compensation, and retirement of the company’s directors, as well as other matters like holding shareholder and board meetings, are governed by the Companies Act, 2013. For registered private limited companies, annual compliance with the RoC is essential. The organization is required to adhere to the yearly compliance requirement, regardless of the overall turnover or capital amount.

Every company that is registered in India, including section 8 companies, private limited companies, limited companies, and one-person firms, must keep yearly annual compliances at the end of the financial year, such as income tax filings and annual returns, every year. Even though registering a company is the most common way to launch a business, after the company is incorporated, several annual compliance requirements must be met.

The challenge for the entrepreneur might be to oversee the day-to-day operations of the company while adhering to complex corporate regulations. Therefore, it is always preferable to get expert assistance and comprehend the legal requirements to guarantee that these compliances are fulfilled on time to avoid penalties or fines.

Compliances to be followed by Private Limited Company

Here is an annual compliance checklist for companies incorporated in India. The compliances followed by Private Limited Company are mentioned below:

1. Statutory Audit Compliance

By looking at bank balances, bookkeeping records, and financial statements, statutory compliances for audit are conducted to ascertain if a business offers correct facts of the financial status.

• A company’s statutory auditor is chosen.
• The company’s auditors will complete the yearly accounts.

2. Annual ROC Filings

The registrar of companies must receive the yearly accounts and returns from Private companies, which reveal information on their directors, shareholders, and other stakeholders.

The ROC must receive the following paperwork as part of the yearly filing:

• The company is required to hold its annual general meeting within sixty days after filing an annual return in Form MGT-7 must be done.
• A private limited company must file Form AOC-4 (Financial Statements) together with the balance sheet, profit and loss account, and director report within 30 days.

3. Auditor’s Appointment

Within 30 days of company formation, all Indian companies are required to appoint a statutory auditor. If the corporation doesn’t designate someone, they will be subject to a 300 rupee monthly penalty in addition to being prohibited from operating their business.

4. Annual General Meeting

A shareholder meeting must be held once a year, no later than six months after the end of the fiscal year. Therefore, the company hold an annual general meeting once a year as per the Companies Act of 2013. The date of the annual general meeting must be communicated at least 21 days before the meeting. Moreover, the first annual general meeting can be held within nine months from the end of the financial year.

AGMs are called in order to approve financial accounts, declare dividends, appoint or re-appoint auditors, commission, pay directors, and other matters.

The meeting is scheduled during working hours, and it must not be a public holiday. It will happen when the business registers or when the registered office is located in a city, village, or town.

5. Board Meeting

The first meeting of a company’s board of directors must be held by the company within 30 days of its incorporation.

• Every three months, the board of directors of the company must meet four times, with a minimum of two directors present or one-third of the total number of directors, whichever is higher.
• In addition, the conversation during the meeting must be written down, Documented in the meeting minutes, and kept in a file at the company’s registered office.
• Seven days before the meeting, a notice of the date and its purpose should be sent as mandated by the Companies Act.

6. Directors Report

Each year, the Director is required to reveal information on his directorships in other firms. This can be accomplished by annually providing a written declaration to the corporation to comply with the annual compliance of the company.

7. Income Tax Compliances

• Advance tax payment on a quarterly basis.
• Every company needs to file income tax returns with the income tax department to maintain compliance.
• Tax audits are required if a company’s gross revenues or sales in the year before the assessment year exceeded Rs. One crore.
• The Tax Audit report must be filed.
• Additional Compliances based on filing requirements.
• In addition to the yearly filings, several other annual compliance with the law must be completed on an annual basis whenever an event occurs inside the organization.

Other event-based Compliances

Here are particular examples of event-based compliances or specific compliances:

• Alteration to the company’s authorized or paid-up capital.
• New shares may be allocated or transferred, and directors may receive loans from other businesses.
• Management or full-time appointment.
• The Director and their payment upon the opening, closing, or modification of a bank account’s signatories.
• If the company’s statutory auditors are appointed or otherwise changed.

For each of these occasions, separate forms must be submitted to the registrar within a given time frame. If this is overlooked, there may be penalties and legal consequences. Therefore, to avoid any legal penalties, it is essential to fulfil these compliances on time.

ROC Compliance for Private Limited Company

Now for one of the most significant and frequently asked questions:

Is ROC compliance required for Pvt Ltd Companies?

Yes, private limited companies must comply with ROC regulations. Penalties and legal ramifications for the firm and its directors may arise from failure to comply with the requirements of the ROC filing process.

In order to preserve its good standing and adhere to legal requirements, the company must also file Document work and forms with the Registrar of Companies in a timely and accurate manner.