Private limited companies are one of the most popular business structures, offering limited liability to shareholders while being subject to specific legal compliances. Understanding and adhering to these requirements is crucial for maintaining smooth operations and avoiding legal penalties. Here’s a comprehensive guide to help you navigate the necessary compliances.
1. Annual General Meeting (AGM)
Every private limited company is required to hold an Annual General Meeting within six months from the end of the financial year. During the AGM, the financial statements are discussed, dividends are declared, and other key decisions are made.
2. Filing of Financial Statements and Annual Returns
- Form AOC-4: Financial statements, including the balance sheet and profit and loss account, need to be filed with the Registrar of Companies (RoC) within 30 days of the AGM.
- Form MGT-7: Annual returns, containing the company’s shareholder and director details, should be filed within 60 days of the AGM.
3. Income Tax Return
Private limited companies are required to file their Income Tax Returns using Form ITR-6 on or before the due date, which is generally 30th September of each year (subject to changes as per government notifications).
4. Auditor Appointment
A private limited company must appoint its first auditor within 30 days of incorporation. After that, the company must ensure the statutory auditor is appointed for a five-year term, and the appointment is ratified at each AGM.
5. Director-Related Compliances
- Director Identification Number (DIN): Every director must obtain a DIN. Any changes to personal details must be updated via DIR-3 KYC annually.
- Board Meetings: At least four board meetings should be conducted in a financial year, with not more than 120 days between two consecutive meetings.
6. Statutory Registers and Records
Companies must maintain several statutory registers, such as:
- Register of Members (Form MGT-1)
- Register of Charges (Form CHG-7)
- Register of Directors and Key Managerial Personnel (KMP) (Form MBP-1)
7. GST Compliance
If the company’s turnover exceeds the threshold limit for GST registration, the company must comply with all GST regulations, including regular GST returns filing (GSTR-1, GSTR-3B, etc.).
8. Tax Audits
Companies with a turnover exceeding the prescribed limit (currently ₹1 crore for businesses and ₹50 lakhs for professionals) must have their accounts audited and file a tax audit report with their Income Tax Return.
9. Compliances under Companies Act, 2013
Some additional filings under the Companies Act include:
- Form ADT-1 for auditor appointment
- Form DIR-12 for changes in directors
- Form INC-22 for change of registered office
10. Other Event-Based Compliances
Event-based compliances arise when there are specific changes in the company’s structure or management, such as:
- Increase in authorized capital (Form SH-7)
- Allotment of shares (Form PAS-3)
- Creation or modification of charges (Form CHG-1)
11. Employee-Related Compliances
- Provident Fund (PF) and Employee State Insurance (ESI) registrations are mandatory if the company employs more than a specified number of people.
- Timely filing of PF and ESI returns is required to avoid penalties.
12. Secretarial Standards
Companies must also adhere to secretarial standards, such as maintaining minutes of board and shareholder meetings, as per the guidelines set by the Institute of Company Secretaries of India (ICSI).
Conclusion
Ensuring compliance with these regulations can safeguard your company from penalties and maintain your business’s good standing. It’s always advisable to consult with a professional, such as a Company Secretary or Chartered Accountant, to stay updated on any regulatory changes and deadlines.