Annual Compliances for Private Limited Company

Mi Book

The term compliance describes the ability to comply with orders, set of rules, or requests. A private limited company that has been incorporated in India must ensure the compliances concerning the Companies Act, 2013 are adequately met. The Companies Act, 2013 regulates the appointment, qualification, remuneration, and retirement of the Company's Directors and other aspects such as conducting board meetings and shareholder meetings.

The ROC compliance for registered Private Limited Companies is necessary. Irrespective of the total turnover or the capital amount, the company must comply with the annual compliance requirement. All companies registered in India like a private limited company, one person company, limited company, and section 8 company need to maintain the annual compliances like annual returns and income tax return each year. Though Company Registration happens to be the most popular form of starting a business, various compliances need to be followed once the business is Incorporated.

Managing the business's everyday operations while complying with the difficult corporate laws can be a task for the entrepreneur. So, it is always better to take the professionals' help and understand the legal requirement to ensure timely fulfillment of these compliances to waive off the penalties or fines. Here, we will look at some of the Common compliances that a private limited company has to ensure mandatorily.

Benefits of Annual Compliance for Private Limited Company

Avoid being a Defaulter

Regular filing of Annual compliance for a private limited company avoids heavy penalties and additional fees in case of non fulfillment of filing the required forms.

Ensures Credibility

Legal compliance is crucial for every organization. Various participants such as investors, ministry tenders and for loan support purposes, the regular filing of annual compliances for a private limited company plays an important criteria to determine the trustworthiness of the company.

Invitation to Potential Investors

In order to ensure the creditworthiness of the company the potential are highly interested in scrutinizing the financial worth of the organization. An investor can directly request the company or check the regular filing status on MCA portal. Hence, potential investors prefer to invest with a company with regular filing of Annual compliance for Private Limited Company.

Process of Annual filing of company

Day 1:

1. Collection
2. Discussion and collection of basic Information
3. Provide Required Documents
4. Decide the due dates of ROC filing for Pvt. Ltd. Company

Day 2 - 4:

1. Preparation
2. Drafting necessary documents
3. Attachment of supporting documents

Day 5:

1. Onwards - Filing
2. Filing of AOC – 4 (Financial Statements)
3. Filing of MGT – 7 (Annual Return)

Due dates of Annual Compliance for a Private Limited Company in 2020

Acquisition of Commencement of business certificate

Registration of companies in India after November 2019 should acquire the commencement of business certificate within 180 days of incorporation of business. Non acquisition will lead to heavy penalties on the company as well as to the Board of Directors.

Appointment of Auditor

All registered private companies are required to appoint a certified auditor within 30 days of incorporation of the company. Non appointment of which will lead to a heavy penalty of Rs. 300 per month and the company cannot start its operating activities.

Filing of MCA Form AOC-4

MCA Form AOC-4 should be filed by all the registered Private limited companies on or before 30th November 2020 for financial year 2019-20. Negligence to file AOC-4 will charge a penalty of Rs.200 per day.

Filing of MCA Form MGT-7

The last date to file MCA Form MGT-7 is on or before 31st December 2020 for financial year 2019-20. Delay of which will attract a penalty of Rs.200 per day of the delay date.

Filing of Income Tax Return

The deadline for filing income tax return (ITR) for financial year 2019-20 has been extended to November 30, 2020 from the normal deadline of 31st July 2020. Non fulfillment will lead to a heavy penalty of Rs.10,000.

Documents required for Annual Filing of company

Incorporation Document
PAN Card, Certificate of Incorporation and MOA – AOA of Private Company

Audited Financial Statements
Financial Statements must be audited by independent auditor

Audit Report & Board Report
Independent auditor’s report and Board report must be provided

DSC of Director
Valid and active DSC of one of the directors must be provided