Private limited companies, renowned for their flexibility and limited liability protection, are a popular choice of business structure. However, these advantages are accompanied by legal requirements that demand attention. Understanding and fulfilling these regulatory obligations are paramount for ensuring the smooth operation and longevity of a private limited company. This article provides comprehensive guidelines on essential obligations, covering ROC and Income Tax compliance, to help companies navigate the legal landscape effectively.
There are primarily two categories of compliance applicable to private limited companies:
ROC Compliance:
INC-20A:
1. This form is filed with the Registrar of Companies.
2. It must be submitted within 180 days of the company’s incorporation.
INC-22:
1. Pertains to any change in the registered office address.
2. Must be filed within 15 days from the date of such change.
DIR-3 KYC Form:
1. All directors of the company are required to submit DIR KYC, akin to Bank KYC, by providing PAN & Aadhar details.
2. The form must be filed within 6 months from the closure of the financial year, with the due date being the 30th of September of the subsequent financial year.
3. Failure to comply attracts a penalty of ₹5000, and after the due date, DIN deactivation occurs, which can be reactivated by paying ₹5000.
DPT-3 (Return of Deposits):
1. This entails the annual return of deposits.
2. Must be filed within 3 months from the closure of the financial year. (30th June )
3. Non-compliance incurs a penalty of a minimum of ₹1 crore or twice the amount of deposits, whichever is lower, extendable up to ₹10 crore.
ADT-1 (Appointment of Auditor):
1. Filed to appoint a statutory auditor.
2. Must be filed within 15 days after the conclusion of the AGM (Note: within 15 days from the date of the Board meeting in the case of OPC).
3. Penalties for delays vary based on the number of days overdue.
Form AOC-4 and Form AOC-4CFS (in the case of consolidated financial statements):
1. These forms entail the filing details of annual accounts.
2. The due date for filing is 30 days after the conclusion of the AGM (Note: in the case of OPC, within 180 days from the closing of the financial year).
3. Penalties accrue for late filings.
MGT-7/MGT7-A (Filing of Annual Return):
1. This involves filing details of annual returns.
2. It must be filed within 60 days after the AGM’s conclusion (in the case of OPC, within 180 days from the closing of the financial year), approximately by the 29th of November every year.
3. Penalties apply for default in filing Form MGT 7/7A.
Income Tax Compliance:
Income Tax Return – ITR -6 Form (based on the company’s financial statements):
Last Due Date – 31st October.
Requirements of Audit:
- Statutory Audit: Mandatory, even if the company is not operational, requiring a Chartered Accountant to sign off on all financial statements.
- Tax Audit: Depends on the company’s turnover, with a turnover limit of ₹10 crore for businesses accepting digital transactions and ₹1 crore for those accepting cash transactions.
Conclusion: Compliance with regulatory obligations is fundamental for the smooth operation and sustainability of private limited companies. By adhering to ROC and Income Tax compliance requirements outlined in this guide, businesses can mitigate risks of penalties and ensure long-term success. Seeking professional advice and staying updated on regulatory changes are vital practices for maintaining legal compliance in today’s dynamic business environment.
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We are open for comments and suggestions. The above article has been prepared as by Ms. Laxmi Malge ([email protected]) and reviewed by Mr. Suyash Tripathi ([email protected])
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