Running a private company in India isn’t just about creating a great product or service, it also involves complying with several regulations outlined in the Companies Act, 2013. This article details 33 important compliance requirements for private companies, covering everything from opening a bank account to maintaining statutory registers.
The Companies Act, 2013 lays out clear guidelines for private companies on topics such as appointment of auditors, board meetings, financial filings, directorship limits, loan protocols, and maintaining statutory registers, among others. These guidelines are designed to maintain transparency, ensure fair practices, and protect the interests of stakeholders. The significance of these compliances cannot be overstated as failure to adhere can result in penalties, and in severe cases, winding up of the company.
List of Compliances applicable to Private Limited Companies under the provisions of the Companies Act, 2013
|
Sr. No. |
Particulars | Compliance Required |
| 1. | Bank Account Open | Within 30 days from the date of incorporation |
| 2. | Appointment of Auditor (Form ADT-1) | First Statutory Auditor has to be appointed within 30 days of incorporation in first board meeting and shall hold office until the conclusion of first AGM (Annual General Meeting).
Note: If somehow Board failed to appoint auditor within 30 days, the members shall appoint the auditor within 90 days at an Extra Ordinary General Meeting (EGM) Subsequent auditors will be appointed for 5 years in AGM. |
| 3. | Declaration for Commencement of Business (Form INC-20A) | Every company before starting its business or exercising its borrowing powers must file form INC-20 A for the declaration of commencement of business within 180 days from the date of incorporation of the company. |
| 4. | Issuance of Share Certificate | Every newly incorporated Company 2 months of Incorporation issue the Share Certificate in Form SH-1 to the Shareholders of the Company. |
| 5. | Notice of Board Meeting | At least 7 days before the meeting. |
| 6. | Board Meetings | Hold a minimum number of 4 meetings of its Board of Directors every year in such a manner that not more than 120 days shall intervene between two consecutive meetings of the Board. |
| 7. | Resident Director | Every Company is required to appoint at least one Director who has stayed in India for a total period of not less than 182 days in the financial year. |
| 8. | Notice of General Meeting | A general meeting of a company may be called by giving not less than clear 21 days’ notice. |
| 9. | Annual General Meeting | It is mandatory for every Private/Public Limited Company to hold an AGM in every Calendar Year. Companies are required to hold their AGM within a period of six months, from the date of closing of the Financial Year.
Note: Newly Incorporated Company can hold their first AGM within 9 months from the date of closing of Financial Year. |
| 10. | Filing of Financial Statement | Every Company is required to file its Financial Statements within 30 days of its Annual General Meeting with Registrar of Company in E-Form AOC-4. |
| 11. | Filing of Annual Return | Every company is required to file its Annual Return with Registrar of Companies within 60 days of Annual General Meeting in E-Form MGT-7/MGT-7A (For One Person Company/Small Company). |
| 12. | MGT-8 | Any company having paid up share capital of Rs.10 crore or more or turnover of Rs. 50 Crore or more shall be certified its Annual Return from a Practicing CS in Form MGT-8. |
| 13. | Number of Directorship | No person shall be a director in more than 20 companies at the same time.
Note: While calculating the limit of 20 companies Dormant & section 8 Companies are excluded Provided that Maximum number of public companies can be 10 Note: While calculating the limit of 10 companies, private companies who are either holding or subsidiary of public companies shall be included |
| 14. | Directors’ Report | Directors’ Report is to be filed covering all the information required under Section 134 within 30 days of AGM along with Form AOC-4. It should be signed by the “Chairperson” authorized by the Board, where he is not so authorized by at least 2 Directors. |
| 15. | Details of Significant Beneficial Owner | If any Company holds more than 10% shares or voting rights and in the same Company any individual hold majority stake, shall give a declaration in Form BEN-1 and Company need to file BEN-2. |
| 16. | MSME Form | Any Company who gets supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty-five days from the date of acceptance or the date of deemed acceptance of the goods or services shall submit a half yearly return in Form MSME-1 to the Ministry of Corporate Affairs |
| 17. | DPT-3 | Every Company other than Government Company shall be required to file this form on or before June 30 of every year with Registrar whose return of deposit or particulars of transaction or both not considered as deposit. |
| 18. | Corporate Social Responsibility | Every company having-
The Board of Director shall ensure that the company spends, in every financial year, at least two percent of the average net profits of the company made during the three immediately preceding financial years. |
| 19. | Internal Auditor | The following private companies are required to appoint internal auditor if;
I. turnover of 200 crore or more during the preceding financial year; or II. outstanding loans or borrowings from banks or public financial institutions exceeding 100 crore rupees or more at any point of time during the preceding financial year: |
| 20. | DIR-3 KYC | Every Individual who has been allotted a Director Identification Number (DIN) on or before 31st March need to submit the form to Central Government on or before September 30 of immediately next Financial Year. |
| 21. | Director WEB based KYC | Any individual holding Directors Identification Number (DIN) is required to do DIR- 3 KYC on a yearly basis. The due date for KYC is 30th September every year. |
| 22. | Minutes of Meeting | Minutes of the General Meeting and Board Meeting should be prepared and signed within the 30 days from the date of the meeting. |
| 23. | Appointment of Additional Directors | The Board of Directors have a power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an additional director at any time who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier. |
| 24. | Regularization of additional director | If company wants to appoint additional director as director, then it shall regularize the person as director in General Meeting by passing Shareholder Resolution. File form DIR-12 for Change in Designation of Director within 30 days of AGM |
| 25. | Adherence to Secretarial Standards | Every company shall observe secretarial standards specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980:
|
| 26. | Secretarial Audit Report | Every company having outstanding loans or borrowings from banks or public financial institutions of 100 crores or more shall annexed its Secretarial Audit Report with Board’s Report.
The format of the Secretarial Audit Report shall be in Form MR -3 |
| 27. | Loan to Director | A company may advance any loan including any loan represented by a book debt, or give any guarantee or provide any security in connection with any loan taken by any person in whom any of the directors of the company is interested, subject to the condition that a special resolution is passed by the company in general meeting. |
| 28. | DIR-8 | Every director shall inform to the company concerned about his disqualification under sub-section (2) of section 164, if any, in Form DIR-8 before he is appointed or re-appointed. |
| 29. | MBP-1 | Every director shall disclose his concern or interest in any company or companies or bodies corporate (including shareholding interest), firms or other association of individuals, by giving a notice in writing in Form MBP 1 at the first meeting of the Board in which he participates as a director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the disclosures already made. |
| 30. | Form for more than two layers of subsidiary | The Company other than exempted Company shall not have more than two layers of subsidiaries except
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| 31. | Holding Subsidiary relation related compliance | Where a company has one or more subsidiaries or associate companies, it shall, in addition to financial statements, prepare a consolidated financial statement of the company and of all the subsidiaries and associate companies in the same form and manner as that of its own and in accordance with applicable accounting standards, which shall also be laid before the annual general meeting of the company. |
| 32. | Related Party Transactions | If any Company is entered into a transaction with related party and the said transaction is beyond the prescribed limit, in this case Company needs to pass an ordinary resolution before the entered into a transaction.
Every contract or arrangement entered shall be referred to in the Board’s report to the shareholders along with the justification for entering into such contract or arrangement. |
| 33. | Statutory Register to be Maintained at Registered Office under Companies Act, 2013 | 1. Register of Deposit
2. Register of Director/KMP 3. Register of Transfer 4. Register of Related Party Transaction 5. MGT-1- Register of Member 6. MGT-2- Debenture Holder 7. MBP-2- Register of Loan & Guarantee 8. MBP-3- Register of Investment of Company not held in its own name 9. CHG-7 – Register of Charges 10. SH-2 – Register of Renewed & Duplicate Share Certificate 11. SH-3 – Register of Sweat Equity Shares 12. SH-6 – Register of Employee Stock Option 13. SH-10- Register of Shares/Other Securities Bought Back. 14. Register of Contract & Arrangements in which directors are interested etc. |
Conclusion: As a private company operating under the regulations of the Companies Act, 2013, it is crucial to be aware of and adhere to the outlined compliances. They form a regulatory framework that not only governs the operations of a company but also contributes to its credibility and trustworthiness. Constant vigilance and proactive measures can ensure your company operates smoothly within the law, avoiding any legal pitfalls. Remember, staying compliant is not just a legal necessity but also a marker of good corporate governance.
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