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Private Limited Company can be termed as a Company which is having private ownership. Private Limited Company may issue shares and have shareholders but their shares do not trade on public exchanges. In this article we have described about Annual Compliance for Private Limited Company.
Private Limited Company is held by few individuals privately having a separate legal entity. It should have a minimum number of 2 directors and it can have the maximum number of 15 directors.
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The following reasons can be considered for incorporating a private limited company:
Private Companies are the most popular form of Company for starting a business. There are various annual compliance which are required to be followed once your business is incorporated. They are as follows:
Income Tax Dept. uses the PAN to track all the compliances & filings of an I.T assessed using the PAN. So a Company soon after its incorporation has to apply for PAN in its own name.PAN is a 10 digit alpha number character issued in the form of a laminated card. It is the first post-incorporation step of a Company.
As per Companies Act, 2013 Company having share capital shall not commence any business or exercise its borrowing power unless a declaration is filed by a director to ROC that every subscriber to the memorandum has paid value of shares agreed to be taken by him.
INC 21 is to be filed within 180 days of its incorporation.
The first auditor of the company shall be appointed within 30 days of its incorporation. He shall hold office till the conclusion of sixth AGM. On his appointment, ADT -1 is required to be filed with the ROC.
Every company shall prepare its accounts and those accounts shall be audited by a CA at the end of the financial year for which it is prepared. The auditor will provide an audit report and the audited financial statement for the purpose of filing it with the Registrar.
Every Private Company is required to file its Annual Return within 60 days of holding its Annual General Meeting. Annual Return shall be filed for the period of relevant financial year.
MGT – 7 is required to be filed for filing an Annual Return with the ROC.
Every Private Company is required to file its Financial Statement i.e. Balance Sheet & Profit & Loss account & Directors Report within 30 days of holding its AGM.
AOC- 4 is required for filing Financial Statement with the ROC.
Every Private Company should hold its AGM every year. And the AGM conducted should be as per the calendar year. Companies are required to hold AGM within 6 months from the close of the financial year.
The private companies need to prepare Directors Report specifying all the required information as mentioned under Section 134.
First Board Meeting shall be conducted within 30 days of its incorporation. Further 4 meetings shall be conducted in a calendar year (once in every quarter).
Note: In the case of a Private Company which is classified as Small Company at least 2 Board Meetings is required in a calendar year (once in every half year).
Private Companies are required to comply with the following tax compliance:
Private Companies are mandatorily required to maintain various registers such as Register of shares, Register of Members, Register of Directors.
Directors of the company are required to disclose their directorship to every other company every year. And any change in the directorship shall also be intimated.
Every Company shall deliver certificates to its members of all securities allotted transferred or transmitted within a period of 2 months from the date of incorporation.
Every director of the company in each financial year will file with the company disclosure of non-disqualification.
The company will send to the members of the company approved financial statement (including consolidated financial statement) cash flow statement, directors report & auditors report at least 21 clear days before AGM.
Private Company having paid-up share capital of Rs. 5 Crore or more are required to appoint a whole-time company secretary.
Every company shall within 15 days of its incorporation is required to have a registered office capable of receiving any communication and notices and the same premises shall be verified within 30 days of its incorporation in form INC-22.
The following benefits of annual compliance can be enjoyed:
If the Company fails to comply with any rules & regulations of Companies Act or any other relevant law under annual compliance, then the company and every officer who is in default shall be punishable with the fine for which default continues.
Read our article:
Loan to Directors under Section 185 of the Companies Act
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
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