Startups and businesses with higher growth aspiration popularly choose Private Company as suitable business structure. The business entity gets recognised as a Company through its registration under Companies Act of 2013 in India.
Private Limited Company:
The Company shall be a private Company within the meaning of Section 2(68) of the Companies Act, 2013, limited by shares and having a minimum paid – up share capital as may be prescribed and shall:
a. restricts the right to transfer its shares;
b. Except in case of one person Company, limit the number of its members to 200;
c. prohibits any invitation to the public to subscribe for any securities of the company;
Quick checklist of all mandatory Compliances for Private Limited Company:
♦ Declaration of Commencement of Business:
Within a period of 180 days of the date of Incorporation of the company.
(Applicable to companies incorporated after 2nd November, 2018.)
♦ Auditor Appointment:
Every Private Limited Company is required to appoint the First Auditor within 30 days of Incorporation of Company. In case of First Auditor, filing of ADT-1 is not mandatory. As per Section 139 First Statutory Auditor of the Company to hold office from the Conclusion of this Annual General Meeting (AGM) till the conclusion of the Sixth AGM of the Company.
♦ Board Meeting
First Board Meeting is required to be held within 30 days after Incorporation. there should be two board meetings conducted in one calendar year.1/3rd of the total number of directors or minimum 2 whichever is greater should be present at the meeting. The gap between two Board Meetings should not be more then 120 days.
♦ Annual General Meeting (AGM)
It is mandatory that one Annual General Meeting be held every year. The gap between two AGMs should not be more then 15 months. The purpose is to discuss financial statement, appointment of auditor, declaration of dividend, remuneration, etc. Annual General Meeting is required to be held at the company’s registered office or at some other place within the city, town or village in which the company’s registered office is situated.
Note: In case of the first Annual General Meeting, it shall be held within a period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year other case, within a period of six months, from the date of closing of the financial year
♦ Director Disclosure
To disclose their interest in any other company, all the directors must fill the form MBP-1. Such a disclosure is to be made every year in the first Board Meeting or Whenever there is change in disclosures of the Company in Form MBP-1.
Note: Form MBP‐1 shall be kept in the records of the Company.
♦ Maintenance of Statutory Records
It is mandatory to maintain statutory registers, Minutes of Board Meeting books, Minutes of AGM books. Company can maintain e- Statutory Register rather then physical Statutory Book.
♦ Annual General Meeting (AGM)
It is mandatory that one Annual General Meeting be held every year. The purpose is to discuss financial statement, appointment of auditor, declaration of dividend, remuneration, etc. Annual General Meeting is required to be held at the company’s registered office or at some other place within the city, town or village in which the company’s registered office is situated.
♦ Form AOC-4 (Financial Statements)
Every Private Limited Company is required to file its Balance Sheet along with statement of Profit and Loss Account and Notice of AGM, Director Report and MGT-9 in this form within 30 days of holding of AGM.
♦ Form MGT-7 (Annual Return)
Form MGT-7 is required to be filed within 60 days from the Date of AGM. Company having paid-up share capital of ten crore rupees or more or turnover of fifty crore rupees or more, shall be certified by a Company Secretary in practice and the certificate shall be in Form No. MGT-8.
Form DIR-3 KYC is required to be filed for all the DIN whose DIN is obtained before 31/03/2019. Incase if yet not filed then Penalty is Rs. 5000/- for the same.
(If not filed then DIN Status will be DIN-Deactivated)
Form INC-22A was required to be filed before 25th April 2019 (Applicable to all companies registered before 31st December 2017). If yet on filed then penalty is Rs. 10,000/-
(If not filed then Company Status will be Active-Non-Compliant)
Q Are there any other Mandatory / Non-mandatory Compliances that are advised to the companies?
Ans : Yes, Absolutely. Some of the non-RoC compliance for private limited companies are:
♦ TDS/TCS payment
♦ GST payment and GST filing (Mandatory in case of Turnover / Can take on Voluntary basis)
♦ Other payments of periodic dues
♦ Filing of quarterly TDS returns
♦ Advance tax payment
♦ Filing of IT returns
♦ Filing of tax audit reports (Based on Turnover of Company)
♦ Tax audits (Based on Turnover of Company)
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