Annual Compliance of the Private Limited Company

All organizations enrolled in India like private limited organization, one-person organization, limited organization, and section 8 organization must document MCA yearly return and annual assessment form every year. Before filling annual compliance, the organization must lead an Annual General Meeting at the end of the financial year.  For newly incorporated Companies, the Annual General Meeting ought to be held inside year and a half from the date of consolidation or nine months from the date of the end of the financial year, whichever is prior. Ensuing Annual General Meetings ought to be held inside a half year from the end of that fiscal year. In India, typically the fiscal year begins on April 1st and end on March 31st. So a Company's yearly profit would be expected for or before September 30th.

What is the annual compliance for private companies?

A private company is an entity enjoying a separate identity which requires maintaining its active status through the regular filling annual compliance. For every company, it is compulsory to file an annual return and audited financial statements with MCA for every financial year. The ROC filing is mandatory irrespective of the turnover, whether it is zero or in crore. Whether a single transaction is done or none, annual compliance for every private company is mandatory.

Every Private Limited Company is required to file its Annual Return within 60 days of holding of Annual General Meeting. Annual Return will be for the period April 1st to March 31st.

Compliance mandatory for private limited company:

Annual Compliance Filing to be done

These are the regular filling which is needed to be submitted at the end of the year:

Annual Return in term of MGT-7: Containing current and updated information about the directors and shareholders of the private limited company, this form is to be filled with relevant ROC within sixty days from the date of the Annual General Meeting. In case, if the paid capital is more than Rs. 10 crore, or its annual turnover becomes more than 50 crore, then there will be arise the requirements of filling the Form MGT-8 also.

Financial Statements in Form AOC-4 : This is to be filed with the concerned ROC within 30 days from the date of the AGM of the company. As per the new provisions given in the companies act of 2013, this will contain a balance sheet, profit and loss account, directors' report and the consolidated financial statement.

Income tax compliance: This is to be filled with income tax department, or on before  30th September of the following financial year. Calculation and Quarterly Payment of Advance Tax

Filing of Income Tax Returns (Tax will be payable at a flat rate of 30% plus Education Cess)

Tax Audit – Mandatory in case sales, turnover or gross receipts of a business exceed Rs. One Crore in the previous year relevant to the assessment year.Filing of Tax Audit Report.

Event-based meeting: These may be related to the internal company administration, external business management, or any sudden and cognitive activities.

Director report: Every director has to disclose his directorship at the end of the financial year. This shall be done by giving a declaration in writing to the company every year in specified director's report format.

Subsequent board meeting: Minimum 4 board meeting to be held every year with not more than 120 days gap between 2 meetings.

Subsequent auditors: The BOD shall appoint the auditor is the first AGM of the company who shall hold the office till the conclusion of 6th AGM and shall inform the same to ROC by filing ADT1. The responsibility to file the Form ADT-1 is that of the company and not of the auditors within 15 days from the date of the appointment.

Statutory audit of account: Every company shall prepare the account and audited by a chartered accountant at the end of the financial year. The auditors shall provide the audit reports and audited financial statements for the purpose of filling with the registrar.

First board meeting: First meeting of the board of directors is required to be held within 30 days of incorporation of the company. Notice of BM must be sent to all the directors of the company.

What is the penalty for not filing annual compliance at the end of the financial year?

The company that doesn't complete the annual compliance at the end of the financial year might be considered a defunct company and will be liable to pay heavy penalty that will depend on the numbers of days past the due date. In the event, if you get failed to file the annual Return and don't know what to do next, it is advisable to take the help of legal consultants like us. We are running of the fastest and reliable legal firm Unilex Business Consultant which helps you regarding all company procedures, right from the incorporation to closure, filing tax claim to annual returns.

What are the due dates to filling the Annual return?

  • First Annual General Meeting- December 31st
  • Consecutive Annual General Meetings- September 30th
  • Filing of Financial Statements (AOC-4)- Within 30 days of AGM
  • Filing of Annual Return (MGT-7)    - Within 60 days of AGM

What is the list of forms required for filing Annual Return?

The list of forms required for filing Annual Return with ROC are:

  • MGT-7 is needed for filing the annual return of the company
  • AOC-4 is required to register the company financial statement with ROC

Benefits of Annual compliance:

Raising the company's credibility: Compliance of the law is the primary duty of all the private limited companies. The data of the company's annual return filing displayed on the MCA portal. Government tenders, credit endorsement or for different comparative purposes, the regulatory in compliance is a significant criterion to measure the credibility of the organization.

Attract investors: While pulling assets for the private limited company from the investors. The investors request all the financial record before finalizing the proposal. The investors can also check the financial records of the company through MCA portal. If they don't find your company's history over there, they may also disapprove of the deal.

Maintain active status and avoid penalties: Continuous failure to file the Annual Return, which affect the status of the company and charge it with heavy penalties. The company can also be declared as a defunct or removed from the ROC.

Final Say:

I hope now you understand the importance of filing the annual compliance of the private limited company. In the event, if you forget to file the annual compliance and come across with heavy penalty, without thinking much, feel free to contact a legal consultant. Unilex Business consultant's professionals will help you and save your company from the defunct.

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