ANNUAL COMPLIANCES REQUIRED FOR PRIVATE LIMITED COMPANY
- JKR Business Consultancy
- Oct 26, 2022
- 4 min read
Updated: Feb 2, 2023
What are compliances to be maintained by the Private Limited Company?
Compliance refers to following instructions, a set of regulations, or demands. A private limited company that was established in India must make sure that the requirements of the Companies Act, 2013, are properly followed. The Companies Act of 2013 oversees the holding of board meetings and shareholder meetings, as well as the selection, training, compensation, and retirement of the company's directors. For registered Private Limited Companies, RoC compliance is required. The business must meet the yearly compliance requirement, regardless of overall revenue or capital investment.
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All businesses that have been registered in India, including private limited companies, one-person businesses, limited corporations, and section 8 businesses, are required to maintain yearly compliances, including filing annual reports and income tax returns.
Even though company registration is the most common way to launch a business, after the enterprise is incorporated, a number of compliances must be followed.
Over time, there have been significant changes to the Private Limited Company's compliance requirements. The private limited company compliance deadlines for 2021 are shown below.
All businesses that have been registered in India, including private limited companies, one-person businesses, limited corporations, and section 8 businesses, are required to maintain yearly compliances, including filing annual reports and income tax returns.
Even though company registration is the most common way to launch a business, after the enterprise is incorporated, a number of compliances must be followed.
The entrepreneur may find it challenging to manage daily operations while adhering to the complex corporate regulations. Therefore, it is always preferable to seek the assistance of specialists and comprehend the legal requirements in order to assure prompt completion of these compliances and avoid penalties or fines.
1. BOARD MEETING
A Private Company shall conduct 4 Board Meetings in a year such that the gap between 2 consecutive Meetings shall not be more than 120 days. The quorum of a Board meeting, i.e. the number of Directors which have to be present at a meeting is 1/3rd of the total number of Directors or 2 whichever is higher.
In case of Small Company (a Private Company in which only individuals are members and has paid-up capital not more than Rs. 4 Crores and turnover not more than Rs. 40 crores), it is sufficient if only 2 Meetings are held in the year. In this case the gap between 2 consecutive meetings should be more than 90 days. This is a great relief for Startup and MSME companies.
2. GENERAL MEETING
The Company is required to conduct its 1st Annual General Meeting,
In case of Companies incorporated on 31st December, 2022 – within 9 months from end of financial year 2022-23.
In case of Companies incorporated in the next year i.e. between 1st January 2023 to 31st March 2023 – within 9 months from end of financial year 2023-24.
Subsequent Annual General Meetings shall be held within 6 months from end of that financial year. Care should also be taken the gap between 2 Annual General Meetings is not more than 15 months.
The General Meeting is that time in the year where the shareholders come together to approve items on Financial Statements, Auditor appointments, Election of Directors and so on. It is also an opportunity for them to be heard before the Board of Directors of the Company.
3. MAINTENANCE OF MINUTES AND REGISTERS
As per the Companies Act, various registers have been prescribed such as,
Register of Members
Register of Sweat Equity Shares
Register of Employee Stock Options
Register of Securities Bought Back
Register of Renewed / Duplicate Share Certificates
Register of Significant Beneficial Owners
Register of Debenture-holders
Foreign Register
Register of Loans, Guarantees and Securities
Register of Directors and Key Managerial Personnel
Register of Charges
Register of Deposits
Register of Investments not held in Company’s name
Register of Contracts in which Directors are Interested
All these registers (as applicable) have to be maintained at the Registered Office and duly updated from time to time. Further the Minutes of the Board Meetings and General Meetings have to be printed, bound and signed by the Chairperson of the meetings.
4. STATUTORY FILINGS
As a business, the Company is required to make various filings such as,
TDS Returns
ESI, EPF Returns
GST Returns
Income Tax Returns
Apart from the above, being registered with the Registrar of Companies under jurisdiction of Ministry of Corporate Affairs, it is also required to make MCA filings. Check out this link for the required statutory compliances based on the type of company.
Event Based Compliances
As the name suggests, upon happening of certain events in the Company, filings are required either to intimate or to seek approval for such events.
For instance if the Company wishes to make change in its Capital structure, it shall file e-form SH-7 duly filled with Digital signature of the authorized persons affixed to it, on the MCA21 platform (www.mca.gov.in).
Annual Compliances
e-forms AOC-4 and MGT-7 are required to be filed without fail every year with the MCA.
Filing of Financial Statements shall be done by the Company via e-form AOC-4 within 30 days from the end of its Annual General Meeting. Depending upon the type of Company, there are various other modified types of AOC-4 which are available, so we should carefully under which we fall and file accordingly.
Annual Return of the Company is to be filled in e-form MGT-7 within 60 days from the end of its Annual General Meeting. As previously discussed, there is a concept of a Small Company. Such Companies shall file their Annual Return in an Abridged form in MGT-7A.
5. MAINTENANCE OF ACCOUNTS
Gone are the days of physical ledgers and books of accounts, Accounting has entered the Digital era. Now with the advent of cost-effective software catering to everyone’s needs, even someone with little to no knowledge of accounting and finance can easily prepare their financial statements and upload their vouchers and other proofs.
It has also made life easier for Auditors who can now be given an Access link to verify the accounts hosted on the Cloud software which further streamlines the process of verification of accounts.
Explore our accounting service here.
If a business violates the rules and requirements of the Companies Act, the business and any of its directors who are in default will be fined for the period the default has been ongoing.
Additional costs are due in the scenario that the yearly filing is overdue. Therefore, it is always advisable to complete the compliances on time.
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