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A Private Company, being a distinct legal entity, must maintain its active status through regular filings with the Ministry of Corporate Affairs (MCA). It is mandatory for every business to submit an annual return and audited financial reports to the MCA for each fiscal year. The filing with the Registrar of Companies (RoC) is obligatory, regardless of the turnover, whether it is zero or in crores. Whether a single business activity is undertaken or not, annual compliances for private limited companies are compulsory, ensuring adherence to regulatory requirements for every certified company.
Both the forms are applied to report the activities and financial date for concerned Financial Year. The due terms for annual filing of a company are based on the time of the Annual General Meeting. The perpetual failure may lead to the elimination of the company’s name from RoC’s register, including incompetence of directors. Also, it has been noticed that MCA has actively taken bold measures for dealing with any such failures. The compliances relevant to the company could be segregated into two sections Mandatory Compliances and Event-Based Compliances.
The followings are some of the mandatory agreements that a private Limited company must ensure:
First Board MeetingThe First Meeting of the Board, along with Directors, is expected to be held within 30 days of the Incorporation of the Company. Declaration of Board Meeting must be sent to each director at least seven days prior to the meeting.
Subsequent Board MeetingsMinimum of 4 Board Meetings to be checked every year with a gap of not more than 120 days between two meetings.
Filing of Acknowledgement of Interest by DirectorsEvery director at:
First AuditorThe Board of Directors shall designate the first Auditor of the Company within 30 days of Incorporation, who shall continue the office till the completion of the 1st Annual General Meeting. In the matter of First Auditor, filing of ADT-1 is not necessary.
Subsequent AuditorThe Board of Directors shall delegate the Auditor in the first Annual General Meeting of the Company, who shall hold the position until the 6th Annual General Meeting and notify the same ROC by filing ADT-1. The capacity to submit Form ADT 1 is of the company and not the Auditor in between the 15 days from the time of appointment.
Annual General MeetingEvery company is needed to hold an Annual General Meeting on or before 30th September every year during working hours (9 am to 6 pm). On a day that is not a general public holiday and either at the certified office of the company within the city, town/ village where the certified office is positioned. A 21-day notice is required to be given for the same.
Filing Of Annual Returns (Form MGT-7)Each and every Private Limited Company is expected to file its Annual Return within 60 days of conducting of Annual General Meeting. Annual Return will be for the time 1st April to 31st March.
Filing Of Financial Statements In (Form AOC-4)Every private Limited Company is expected to file its 'Balance Sheet' along with a statement of 'Profit and Loss Account' and 'Director Report' in this Form within 30 days of holding off 'Annual General Meeting'.
Statutory Audit of AccountsEach and every company should prepare its Accounts and get the same audited by a Chartered Accountant or any appropriate person at the end of the Financial Year mandatorily. The Auditor should provide an Audit Report and the Audited Financial Statements to file with the Registrar.
event-based compliances are imperative and must be adhered to upon the occurrence of specific events such as changes in directors, alterations in the registered office, or modifications in the approved share capital. Some of these event-based obligations include, but are not limited to, the following, each subject to its respective time limit:
| Actions | Form No. | Phase Limit |
|
Change in registered office |
INC-22
|
Within fifteen days from the date of such change |
|
Change in Directors or KMP
|
DIR-12
|
Within 30 Days of such change |
|
Increase in Authorized Share capital
|
SH-7
|
Within 30 days of passing Ordinary Resolution |
|
Filing of resolution and agreements
|
MGT-14
|
Within 30 days from date of passing resolution |
|
Increase in Paid up share capital (Issue of security) |
PAS-3 |
Within fifteen days from the date of the allotment |
|
Change in secured borrowing (Creation, modification and satisfaction of charge) |
CHG-1
|
All types of Charges within 30 days of its creation |
|
Application for KYC of Directors
|
DIR-3 KYC
|
On or before 30th April of immediate next Financial Year (Annual Compliance) |
|
ACTIVE (Active Company Tagging Identities and Verification) |
INC-22A |
On or before 25th April 2019 (Applicable to all companies registered before 31st December 2017) |
|
Declaration of Commencement of Business |
INC-20A
|
Within a period of 180 days of the date of incorporation of the company. (Applicable to companies incorporated after 2nd November, 2018.) |
| Essentials | Form No. | Phase Limit |
|
Change in Directors or KMP |
DIR-12 |
Within 30 Days of such change |
|
Increase in Authorized Share capital |
SH-7 |
Within 30 days of passing OR |
|
Increase in Paid up share capital (Issue of security) |
PAS-3 |
Within fifteen days from the date of the allotment |
|
Change in registered office |
INC-22 |
Within fifteen days from the date of such change |
|
Change in secured borrowing (Creation, modification and satisfaction of charge) |
CHG-1 |
All types of Charges within 30 days of its creation |
|
Change of name of company |
INC-24 |
Within 60 days from the date of applying reservation of name in INC-1 |
|
Conversion of company |
INC-27 |
– |
|
Filing of resolution and agreements |
MGT-14 |
Within 30 days from date of passing resolution |
|
Removal of Auditor before Expiry |
ADT-2 |
Within 30 days from date of passing SR |
|
Application for KYC of Directors |
DIR-3 KYC |
On or before 30th April of immediate next Financial Year (Annual Compliance) |
|
Report for Disqualification of the Director |
DIR-9 |
To be filed by company within 30 days of such disqualification |
Compliance with the law is the fundamental requirement for any company—the date of the company's annual return filing is displayed on the MCA portal. The government tenders, loan approval or for other purposes, the regularity in the compliance is an important criterion for measuring the credibility of a company. The regularity in compliance also increases the business's credibility, attracts more customers and helps in obtaining the government tenders and loan approval.
The main focus points with regard to the investors are financial records and compliances. Before investing in any company, the investors first look into the regularity of filing the annual returns on the MCA portal. Investors are always inclined to favour the companies with regular compliance. Thus, for a private company to attract more investors, it is important to file annual compliance regularly.
It is important for a private company to file annual compliances on a regular basis to avoid penalties. Failure to file the annual compliance can also reduce the status of the company's business. The company may also be disclosed as defunct or removed from the ROC. The concerned directors are also excluded and debarred from their further appointment. Since July 2018, a supplementary fee of ₹100 for each day of delay has been levied till the date of filing.
All the companies pertaining to the Private limited category are expected to have sanctioned records maintained update for the following members, charges, loans and investments
Yes. RoC compliance for 'Private Limited Companies' is mandatory for every certified company. Irrespective of the entire turnover or the capital amount, the company should comply with the annual compliance mandates. The 'annual compliance' is due after the AGM of the company every it's an initial fiscal year.
From July 2018, companies missing to follow the statutory compliance for Private Limited has been charged ₹100 for 'each day' of a delay till the exact date of filing. For constant non-compliance/failure, penalty apart from the additional Government fee can be levied on both – company and directors, including the imprisonment.
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