RishiMANDATORY COMPLIANCES FOR PRIVATE LIMITED COMPANIES
A Private Limited company is the most common form of starting a business. It gives the benefit of higher goodwill, more recognition and is more preferred over other forms of business.
Incorporation of Private Limited is done with the help of a professional. A professional helps you to complete all the compliances of the company. But as a Director/ Shareholder/ Member of the company you must be aware of all the compliances to be fulfilled to avoid any penalty or late fees due to non-compliances.
Here is a list of compliances that a company need to fulfil in order to keep all the compliances up to date.
Compliances relating to filing of Forms:
1. Auditor Appointment : Every company is required to appoint an auditor within 30 days of the incorporation of the company. Irrespective of the fact that your CA is an Individual or a firm, they can be initially appointed for the first year of audit of the company. It can be done through form ADT-1.
2. Form INC20A : Form INC20A or Commencement of Business form is a form in which the professional certify that the company has introduced the relevant capital in the company as per the rules. A company can start business only after filing form INC20A.
Also, any other ROC form cannot be filed before filing Form INC20A.
3. Form DIR-3 KYC : Every Director of the company who has been allotted a DIN is required to File form DIR-3 KYC. This is to be done annually. Even those DIN holders who are not a director in any company are also required to file form DIR-3 KYC. Directors who are disqualified but want to keep their DIN active must also do DIR-3 KYC every year.
4. Annual Statutory Audit : Every company is required to get its account audited by a Chartered Accountant. Even if the company is not working or is currently having no turnover then also the Annual Statutory Audit is mandatory.
5. Annual ROC : ROC is a term used generally. It refers to annual filing of Forms AOC-4, MGT-7. It is also mandatory to be filed every year.
General Compliances
1. Board Meetings : The First Board meeting is to be held within 30 days of the incorporation of the company. At least 4 Board meetings must be held in a calendar years. There must not be a gap of more than 120 days between 2 board meetings. However small companies are required to do at least 2 Board meetings only in a calendar year. Notice of Board Meeting must be given 7 days prior to the meeting. Notice can be delivered either by hand, through registered post or electronic means.
Every board meeting is required to fulfil the condition of quorum which is 1/3rd of the total number of directors of the company or two whichever is higher.
2. Directors Report : It is a financial document which is to be filed at the end of each financial year. It is a part of set of financial statements. Directors are required to report on many points in Directors report like the performance of the company, Dividends, No of Board Meetings, Directors appointed/ resigned during the year, Directors remuneration, Related Party Transactions, Directors responsibility statement etc.
3. Annual General Meeting : Every company is required to hold a meeting of shareholders once a year. It is to be done within 6 months from the date of closing of financial year. In Annual General Meeting the agenda consists of approval of financial statements, declaration of dividends, appointment or re-appointment of auditor, remuneration of directors. AGM must be held during business hours on a day other than public holiday.
4. Extraordinary General Meeting : EGM is not mandatory but can be called upon to take major decisions of the company.
5. Income Tax Compliances : Every company must file its Income Tax Return annually. Taxes for the same are required to be deposit quarterly which is also referred to as Advance Tax. Tax Audit is required if the annual turnover of the company is Rs 1 crore or more. Tax Audit is filed by a Chartered Accountant.
6. Tax Compliances : Depending on the company, it may be required to obtain several Tax Registrations such as GST, ESI, EPF, Professional Tax, Excise Registration etc. The company is required to fulfil the compliances relating to those registrations.
7. Book Keeping : Every company is mandatorily required to maintain books of accounts. These are to be made on accrual basis. Initially the companies can take help of Part Time accountants or consultants for this. Afterward they can hire full time accountants.
8. Registrations : Depending on the company, it may be required to obtain certain licenses, registrations such as Food License, Trade License, MSME, Import Export Code etc. The company is required to fufil the compliances of those registrations.
9. Maintenance of Statutory Records and Registers: Every company is required to keep statutory registers as required by the company law such as Register of Shares, Register of Members, Register of Directors, Minutes of Meetings, Various resolutions passed. These records are required to be kept for a period of at least 8 financial years.
10. Event Based Compliances : Whenever a company takes any major decision the compliance relating to that must be checked and help of professional is recommended.
List of some compliances in which the company is required to intimate ROC are as follows:
· Appointment or Resignation of Director
· Name change of the company
· Change of Registered Address of the company
· Giving Loan to other companies
· Giving Loan to Directors
· Change of Authorized or Paid up capital of the company
· Appointment or Change of Auditor of the company
· Opening or closing of bank accounts or change in signatories of Bank Account
· Creation or Closure of Charge on Loan
11. Company Specific Compliances : On the Basis of certain limits the companies are required to fulfil some compliances. List of some compliances are as follows:
· Appointment or removal of Cost Auditor
· Women Director
· Independent Director
· Consolidation of Financial Statements
· Small Shareholders Director
· Audit Committee
· Nomination & Remuneration Committee
· Corporate Social Responsibility (CSR)
You may contact the author for further information at +91-9899595719 or Taxwizersconsultant@gmail.com or https://www.taxwizersconsultant.com/
Disclaimer: The above article is only for information purpose and is on based on the author’s interpretation of the relevant provision. The same should not be considered as professional advice.
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