A Private Limited Company in India is one of the most preferred business structures due to its distinct legal identity, limited liability protection, and perpetual succession. However, to maintain legal standing and avoid penalties, companies must adhere to annual compliance requirements as mandated by the Companies Act, 2013, Income Tax Act, GST laws, and other regulatory frameworks.
The Public Limited Enterprises in India are needed to prepare the greatest number of annual compliances each year if we study their filings compared to the Private Limited Companies. The listed companies in both the public and private segments which generate the highest degree of periodic and yearly compliances every fiscal year must take care of a handful of provisions.
The amended Companies Act (2013) has transformed the annual company compliance to be procured by a limited company rather stringent and comprehensive, while the policies and legislative executions associated with SEBI, RBI, FEMA etc. have now appeared to be more methodical and dynamic.
Therefore the companies that are particularly listed in the index are now more concerned than ever in making annual company compliance in addition to tax-involving compliances. We must clear the fact that these Statutes and legal enforcements exert rigorous policies of hefty penalties, monetary loss and sometimes even worse (imprisonment) if the companies file delayed compliances.
What is Annual Compliance for Private Limited Company?
A Private Limited Company requires to maintain its active status through regular annual reporting to the Ministry of Corporate Affairs. Every private company must submit an annual report and audited financial statements to the Ministry of Corporate Affairs for each financial year. Submission to the commercial register is mandatory regardless of turnover, regardless of whether it is zero or crores. Regardless of the number of transactions made, annual compliance is mandatory for every registered company.
Every private limited company has to file various forms and documents every year under the Companies Act, 2013, and the Company Incorporation Rules, 2014. A private limited company is a separate legal entity that provides the benefit of limited liability to its shareholders. A limited liability company must avoid legal disputes that would damage its image and company name. If the company follows compliance procedures, there will be no legal fines or penalties.
Documents required to start the Annual Compliance for Private Limited Company
- Certificate of Incorporation of the Private Limited Company
- PAN card of the Private Limited Company
- MOA – AOA of the Private Limited Company
- An active Digital Signature of one of the directors is to be provided and submitted.
Required Annual Compliance for Private Limited Company
- Declaration of Commencement of Business
Companies incorporated after November 2019 and having share capital must file a declaration of commencement of business (Form INC-20A) within 180 days of incorporation. This declaration confirms that the company has received its subscribed share capital. Failure to comply may lead to penalties of ₹50,000 for the company and ₹1,000 per day for directors during the default period.
- Appointment of Auditor
Every Private Limited Company must appoint a statutory auditor within 30 days of incorporation by filing Form ADT-1. The auditor plays a crucial role in verifying financial statements and ensuring regulatory compliance. Failure to appoint an auditor may lead to restrictions on company operations and penalties. Ensure compliance with the mandatory rotation of auditors as per the provisions of the Companies Act 2013. Appoint a new auditor if necessary or re-appoint an existing auditor for a further term during the general meeting. Companies are required to file the necessary forms with the ROC to register the appointment or reappointment of auditors.
- Conducting Board Meetings
Companies are required to hold their first Board Meeting within 30 days of incorporation. Subsequently, at least four Board Meetings must be conducted in a financial year, with a maximum gap of 120 days between two meetings. Proper notice must be sent to all directors, and minutes of meetings should be recorded and maintained.
- Annual General Meeting (AGM)
An AGM must be conducted annually, within six months from the end of the financial year, and not later than 15 months from the previous AGM. The AGM is essential for approving financial statements, declaring dividends, appointing or reappointing auditors, and discussing key business matters. It is crucial to call the annual general meeting before the set date to comply with the Companies Act 2013. Further, the first annual general meeting is allowed to hold the annual general meeting by 31st Dec of the succeeding financial year for the first year.
- Preparation and Filing of Financial Statements (AOC-4)
Companies must prepare financial statements, including the balance sheet, profit and loss account, and cash flow statement, in accordance with applicable accounting standards. These statements must be approved by the Board of Directors and filed with the Registrar of Companies (RoC) using Form AOC-4 within 30 days of the AGM. Non-compliance may attract penalties of ₹100 per day of delay. Limited companies must keep accurate financial records, including balance sheets, profit and loss statements, and cash flow statements. The financial statements should be prepared under the Generally Accepted Accounting Principles (GAAP) and following the Companies Act, 2013, and Indian Accounting Standards (Ind AS).
- Filing of Annual Return (MGT-7)
The annual return, which includes information about shareholders, directors, and other company details, must be filed with the RoC using Form MGT-7 within 60 days of the AGM. Non-compliance may result in penalties of ₹100 per day.
- Directors’ Disclosure of Interest (MBP-1)
Every director must disclose their interest in other entities annually by submitting Form MBP-1 at the first Board Meeting of the financial year. This ensures transparency and helps in avoiding conflicts of interest.
- Directors’ KYC (DIR-3 KYC)
Every director must submit their KYC details annually through Form DIR-3 KYC. Failure to do so may result in the deactivation of the Director Identification Number (DIN) and financial penalties.
- Maintenance of Statutory Registers and Records
Companies must maintain various statutory registers, including:
- Register of Members
- Register of Directors & Key Managerial Personnel
- Register of Charges
- Register of Loans & Investments
- Minutes of Board and General Meetings These records must be updated regularly and kept at the company’s registered office.
- Income Tax Return Filing
Companies must file their income tax returns annually by September 30th of the assessment year. Failure to comply may result in penalties and interest on unpaid taxes.
- Tax Audit (If Applicable)
Companies exceeding the prescribed turnover threshold must undergo a tax audit and submit the tax audit report by September 30th of the assessment year.
- Goods and Services Tax (GST) Compliance
If a company is registered under GST, it must file the following returns:
- GSTR-1 (Monthly/Quarterly for outward supplies)
- GSTR-3B (Monthly summary return)
- GSTR-9 (Annual GST return) Non-compliance may lead to penalties and interest charges.
- TDS Compliance
Companies deducting Tax Deducted at Source (TDS) must file quarterly TDS returns (Form 24Q, 26Q, etc.) and issue TDS certificates (Form 16, 16A) to deductees.
- Other Event-Based Compliances
Certain events require additional filings with the RoC, including:
- Change in company’s registered office (Form INC-22)
- Appointment or resignation of directors (Form DIR-12)
- Change in shareholding pattern (Form MGT-7A)
- Increase in authorized capital (Form SH-7)
- Annual statutory audit and submission of financial statements: Hire a qualified Chartered Accountant (CA) to conduct a statutory audit of the company’s financial statements. The audited financial statements along with the director’s report should be filed with the Register of Companies (RoC) within 30 days of the general meeting. Failure to register within the prescribed period may result in penalties and legal consequences.
- Compliance with tax obligations:
- Income Tax Returns: Limited companies have to file their Income Tax Returns (ITRs) with the Income Tax Department by the due date, which is usually 30 September after the end of the fiscal year.
- TDS Compliance: Ensure timely deduction and payment of TDS (Tax Deducted at Source) on relevant transactions. Submit TDS returns within the prescribed time limits and issue TDS certificates.
- Goods and Services Tax (GST): Comply with GST regulations, including filing regular GST returns, paying tax obligations, and keeping accurate records.
- Annual return submission: File the annual return in Form MGT-7 with the RoC within 60 days from the date of the general meeting. The annual report contains data on the company’s shareholders, directors, registered office, share capital, and other material information.
- Regulatory reporting compliance:
Apart from annual filings, private limited companies have to comply with various periodic filings such as:- Submission of financial statements and annual reports in XBRL format, if relevant.
- Submission of forms related to the establishment/adjustment of the easement on the company’s property, if any.
- Completion of forms for any significant changes in the company’s share capital, executives, headquarters, etc.
Non-registrar Annual Compliance for Private Limited Company ?
- Disbursement of periodic payouts (GST amounts, TCS, TDS payment, PTax and Advance tax)
- Periodic returns filing comprises:
- Annual/ quarterly/ monthly GST
- TDS Returns (quarterly filing)
- Evaluation of advance tax (as per Section 208)
- Filing of IT Returns
- Profession tax return filing
- PF Returns filing
- Tax Audit Report filing via Forms 3CB and 3CA
- Filing of ESIC Returns (half-yearly)
- Regulatory reporting and assessment of various Acts, for example, the Factory Act, Competition Act, 1986’s Environment Protection Law, etc.
What Are the Forms Required to Be Filed With MCA as part of Annual Compliance of Private Limited Company ?
| Name of E-forms/ return | Purpose of E- Form/Return | Due Date of Filing |
| DIR-3 KYC | Individuals holding a DIN are required to submit the necessary documents for DIR-3 KYC/WEB KYC. | This must be completed within 6 months after the end of the Financial Year. |
| DPT-3 | Yearly report on deposits and exempted deposits. | Within three months following the end of the financial year. |
| BEN-1 | Any individual who becomes a beneficial owner afterward, or experiences a change in their beneficial ownership, must submit a declaration using Form No. BEN-1 to the reporting entity, indicating their significant beneficial ownership or any modifications to it. | All companies are required to update the Registrar in accordance with Section 90 and Rule 4 of the Companies (Significant Beneficial Owners) Rules of 2018. |
| Form AOC-4 | Filing of annual accounts | Thirty days after the conclusion of the AGM. (Note: For OPCs, it’s within 180 days from the closing of the financial year.) |
| MGT- 7 | Filing of annual returns | Sixty days after the conclusion of the AGM. (Note: For OPCs, it’s within 180 days from the closing of the financial year.) |
| Form DPT-3 (One Time) | For any non-government company with outstanding money/loan receipts, excluding deposits. | The form must be completed annually by June 30 and provide information up to March 31 of that year, duly audited by the company’s auditor. |
| Form INC- 20A | Commencement of Business Certificate | Within 180 days from the company’s incorporation. |
| INC-22 | Change in registered office | Within fifteen days from the date of such change |
| MSME-I (first time) | For each designated company that obtains goods/services from MSMEs. | Within thirty days from the availability of the form on the MCA portal |
| MSME-I (half-yearly) | For each designated company receiving goods or services from MSMEs. | Filed within 45 days from the end of each half-year |
| Form ADT-1 (Annually) | Appointment of Auditor | First Auditor needs to Incorporated Within 30 days following the company’s incorporation, and the appointment needs to be submitted to the Registrar of Companies (RoC) using Form ADT-1 (Though not mandatory to file ADT – 1 for First Auditor). Subsequently, the auditor is appointed within 15 days after the first Annual General Meeting (AGM) for a tenure of five years, and ADT 1 is to be filed compulsorily now. Subsequently, whenever a new auditor is appointed, ADT 1 is to be filed |
| DIR-3 KYC (Annually) | For every person who has allotted DIN | By April 30 of the following financial year (annual compliance). |
| DIR-9 | Report for Disqualification of the Director | The company must file this within 30 days of the disqualification. |
| DIR-12 | Change in Directors | Within 30 Days of such change |
| ADT-2 | Removal of Director before Expiry | Within 30 days of when such a resolution was passed. |