Annual Compliance Checklist for Private Limited Company – Companies Act 2013

Annual Compliance Checklist for Private Limited Company as Per the Companies Act, 2013 And Rules Made There Under

A: INTRODUCTION:

Private limited companies are a common choice for businesses, but they must stick to follow specific compliance requirements outlined in companies act, 2013 and rules made there under. One essential responsibility for them is preparing all necessary legal documents and submits them to the Registrar of Companies (ROC). These compliance requirements are significant for maintaining the company’s legal standing and ensuring transparency in its operations. In this article, we will explore why annual compliance matters and which essential documents must be submitted to the ROC.

B: WHY ANNUAL COMPLIANCE IS IMPORTANT:

Annual compliance with the ROC is not just a legal obligation but also a means to ensure that a company is in good standing. Here’s why it’s essential:

LEGAL COMPLIANCE

Compliance with annual compliance requirements is mandated by the Companies Act, 2013. Failure to comply can result in penalties, fines, or even the striking off of the company’s name from the Register.

TRANSPARENCY

Annual compliance provides transparency regarding the company’s financial health, ownership, and operations. This information is essential for shareholders, investors, creditors, and regulatory authorities.

ACCESS TO BANKING AND FUNDING

Banks and financial institutions often require updated financial statements and compliance records for loan approvals. Investors also scrutinize these filings before investing in a company.

GOOD CORPORATE GOVERNANCE

Filing annual returns and other compliances demonstrates a commitment to good corporate governance, which can enhance a company’s reputation and trustworthiness in the business community.

LEARNING AND IMPROVEMENT

The annual compliance & filing process can be an opportunity for companies to learn from their financial performance and corporate governance. It allows for self-assessment and can lead to improvements in business strategies and practices.

PROTECTING LIMITED LIABILITY

One of the advantages of a private limited company is limited liability for its shareholders. Timely annual compliance & filings help maintain this limited liability status, protecting shareholders’ personal assets in case of company debts or legal issues.

REGULATORY CHANGES

The regulatory landscape for companies can change over time. Staying up-to-date with annual compliance ensures that a company remains in compliance with the latest legal requirements and regulations.

EASE OF DOING BUSINESS

A well-documented history of annual compliances simplifies various business transactions. Whether it’s entering into contracts, acquiring assets, or engaging in mergers and acquisitions, a company’s filing history can streamline these processes.

C: ESSENTIAL DOCUMENTS AND FILING FOR ANNUAL COMPLIANCE:

Private limited companies are required to file the following documents annually with the ROC:

Half yearly return for outstanding payment to MSME in Form MSME-1

Within one month of the end of each half of the financial year – on or before 30^th April & 30^th October.

Return of deposits in DPT-3 – On or before 30th June

Director KYC – On or before 30^th September

Annual General Meeting (AGM) of the Company must be held within six months from the end of the financial year – on or before 30^th September

Auditor appointment/reappointment if any in ADT-1 with ROC within 15 days from the date of the AGM – on or before 14^th October

Filing of Financial Statement (Form AOC-4) with ROC within 30 days from the date of the AGM – on or before 29^th October

The financial statements include the balance sheet, profit and loss account, cash flow statement, and notes to accounts. These statements must be prepared in compliance with the applicable accounting standards and audited by a qualified auditor. Also the directors’ report and auditors’ report are part of the financial statements and provide additional insights into the company’s performance, financial position, and compliance with statutory requirements. Form AOC-4 must be filed within 30 days from the AGM date.

Apart from ROC filings, a private limited company must also file its income tax return with the Income Tax Department.

Filing of Annual Return (Form MGT-7A/MGT-7) with ROC within 60 days from the date of the AGM – on or before 29^th November

The annual return contains information about the company’s shareholders, directors, changes in share capital, and details of its registered office. This form must be filed within 60 days from the date of the Annual General Meeting (AGM).

Other event based compliances will be applicable to the private limited company for example director appointment resignation, registered office shifting, share transfer, loan taken or given etc.

Maintain following statutory records:

• Board meeting Notice, Proof of dispatch, Attendance sheet & Minutes
• Annual General Meeting Notice, Proof of dispatch, Attendance sheet & Minutes
• Extra Ordinary General Meeting Notice, Proof of dispatch, Attendance sheet & Minutes
• Director disclosure in MBP-1 & Dir-8
• Register of Director, Member, Allotment, Share transfer, Split of Share, Related Party transactions etc.
• Share certificate, Memorandum of Association, Article of Association
• Renew and update all contracts, agreements, licenses etc.
• Other event based records

It’s important to note that non-compliance with these deadlines can result in penalties and legal consequences.

In conclusion, annual compliance and filing with the Registrar of Companies is a crucial aspect of maintaining a private limited company’s legal status and credibility. It ensures transparency, compliance with legal requirements, and access to various benefits, including funding and investor trust. Therefore, company owners and directors must prioritize timely and accurate annual compliance and filings to avoid any legal or financial repercussions.

*****

DISCLAIMER: This article is based on the relevant provisions and to the best of my knowledge at the time of preparation of this article and moreover in no event author shall be liable for any direct and indirect result from this article and this is only a knowledge sharing initiative provided solely for information, this article is not a professional advice or recommendation.

 AUTHOR: CS JINAL SHAH, JINAL SHAH & CO. Company Secretary in Practice from Surat, Gujarat and for any query feel free to contact us on jinalshahco@gmail.com or 9173610133.