Annual Compliances for Private Limited Company -Legaltoast

annual compliances for private limited company

Obligatory compliances for Private Limited Companies include filing of Declaration of Commencement of Business, legal registrations, facilitation of AGM & Meeting of Board of Directors, etc.

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Annual Compliances for Private Limited Company - OVERVIEW

The Ministry of Corporate Affairs administers all Private Limited companies in India under the Companies Act, 2013. According to this Act, all company, post-incorporation, has to fill some essential legal responsibilities. The compliance obligations are complex, with each falling on different due dates, and failing to meet them promptly can significantly impact a company.

This may entail paying heavy fines (up to Rs. 1 lakh a year) or the organizations and their directors delisted for a short period.

You should maintain a public record consisting of the company’s information, which is called the company’s annual returns, which will be prepared in the Companies Register. Every year, you are deemed to renew the yearly return companies regularly.

We at legaltoast will provide you with complete guidance on Annual Compliances for Private Limited Company with our expert team with comprehensive experiences in the respective fields.

Benefits Of Filing Mandatory Compliances

- Improve operational performance
- Higher employee retention
- Better information governance
- Foster best practice

FILING ANNUAL COMPLIANCES FOR PRIVATE LIMITED COMPANY - A DETAILED PROCESS

Following are the necessary Annual Compliances for Private Limited company have to fill. At legaltoast, our expert Chartered Accountants, Accounting & Taxation experts, and CS (Company Secretaries) will take responsibility for all your compliance requirements. We offer the best-in-class legal consultation for your company. Our team will satisfy the MCA’s following compliance requirements Ministry of Corporate Affairs (MCA).

We have elaborated below Annual Compliances for Private Limited Company has to ensure mandatorily:

Facilitation Of Meeting Of Board Of Directors:

The first meeting has to be led within 30 days of incorporating a company, after which 4 meetings shall be taken every quarter in a business year. There should not be longer than 120 days of gap between the two following meetings.

Preparation Of Minutes Of Proceedings Of Meeting:

Every company requires registering its minutes of the meeting, and it shall be filled permanently to add value in case of any conflict. The Meeting Minutes will be kept at the Registered Office.

Issuing Of Share Certificates:

The company must publish a share certificate to the subscribers of the memorandum within 60 days of the association.

Register Of Disclosure Of Director’s Interest And Declaration Of Disqualification:

In the first Board Meeting, all the Directors are obliged to confess their interest in additional business objects.

Register Declaration Of Commencement Of Business Including RoC:

This has to be done upon the filing of the company. Application INC 20A compulsorily needs to be filed in 180 days from the establishment.

Facilitation Of Annual General Meeting:

An organization shall conduct at least one AGM each year. The first AGM shall be held nine months from the closing of the company’s first business year. In other cases, it shall be held in six months from the closing of the business year.

For Eg: If a Company is organized on or before 31st December 2018, the First Annual General Meeting must be directed in 9 months from the date of closing of 1st Financial Year ( 31.12.2018 – 31.03.2019), that is, by 31st December 2019.

If a Company is organized on or after 1st January 2019, First AGM to be conducted in 15 months, i.e., by 31st December 2020.

Annual Return companies have to be filed by the RoC within 60 days of AGM completion.

Quarterly Compliance:

Every organization has to endure a minimum of four meetings and one board of Directors meeting, that is, at least one meeting every quarter of the year.

Statutory Registrations:

All lawful registration, like Tax, PF, ESI, IEC, etc., must be done.

When can Directors be disqualified from the company?

As per requirements mentioned in Section 164 of the Companies Act of 2013, a Director of a company can be excluded if:

- - He does not possess a sound mind, and a competent court declares so
  - He is alleged insolvent;
  - His purpose for being declared insolvent is Pending with the relevant authority.
  - He has been convicted of any crime by a competent court. Also, if he has been jailed for at least 6 months and the penalty has not departed in the last 5 years. Still, if he has served at least 7 years after conviction in any crime, he will not be eligible for the directorship of any organization.
  - He has been convicted of any crime U/S 188 related to party transactions in the last five years.
  - A tribunal or a court passes an order to disqualify his appointment as a director, and the order above remains in force.
  - He is yet to pay any call regarding any company share held by him alone or jointly, even after the expiry of 6 months from the fixed date of payment.
  - He has failed to file the company’s annual returns or financial records to the MCA for 3 financial years in succession.
  - He could not get the Director Identification Number.
  - He could not pay the deposits accepted or the interest accrued thereon for at least one year.
  - He failed to obtain any debentures on time or could not return the interest accumulated for at least a year.
  - He could not repay any dividend declared for at least a year.

PROCEDURE To file Annual Compliances for Private Limited Company

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Make a partial payment (Rs.499)

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Note: After completing the process, you have to make the whole payment of the amount.

FAQS ON ANNUAL COMPLIANCES FOR PRIVATE LIMITED COMPANY

Do I require to file for compliance even if there are no transactions?

Yes, all companies, irrespective of the number of transactions, have to get the compliance filings done. Still, the process will be much easier.

What will happen if the company has passed in designating the directed number of Directors?

A private limited company should have a minimum of 2 directors and a maximum of 15. If more than 15 directors are appointed, the company must file an MGT-14 form and provide the SRN.

What are the documents to be registered with the RoC every year?

Balance sheets and Annual Returns have to be registered once a year. In addition, organizations have to file Form 3 if there is Return of Allotment, Form No INC-22. Also, if there is a change in the Registered Office; Form No DIR-12 for Change of Directors; etc.

Where and when should the AGM be conducted?

The AGM has to be conducted at the company's registered office or at any other place within the city, town, or village wherever the registered office is situated. The meeting should happen during business hours (9 am-6 pm) on any day, not a national holiday declared by the Central Government.

Can alternative directors be designated to represent the three directors of a company?

Yes, the Board of Directors can select a person for other directors. But they must not have been owning a related post in any other company.

Can Board meetings be conducted abroad?

According to the Companies Act, annual compliance for OPC Board Meetings can be conducted even outside India. Managers can participate through video conferencing or other audiovisual components if required, provided a prior notification. The minutes of procedures shall be duly recorded. However, there are several matters defined by the Act to be convened through a Video Conference Meeting.

Is there any option if the Director is unavailable to attend the meeting?

A Director has to be present to attend at least one Board meeting of the company. An alternative director may be elected to participate in the meeting in the absence of the original Director. If a director absents himself from all the Company's Board Meetings, he has to be vacated from the Office of Directorship of the company.

If any changes are made after registering the Declarations of interest of Directors, should the filings be made again?

Whenever a transition occurs in the interest of Directors, the same has to be disclosed at the first Board Meeting existed. As per section 184, whenever any change happens in the interest of Directors, a declaration of the same is needed to be made at the first Board Meeting held after such change.

Can a one-person be Director in two companies?

The Companies Act 2013 permits one person to be the managing Director in up to 2 companies together.

What are the mandatory requirements for annual compliances for OPC?

Although the private company and OPC are both governed under the Companies Act, 2013, both OPC and a private company have significant differences on several grounds.