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Annual Compliance of Private Limited Company
According to the data, almost 1.28 lakh companies were struck off from records due to non-compliance in 2023. Registration is not the end for companies. Whether a public company or a private one, companies registered in India have several post-registration compliances under the Companies Act, 2013, and tax laws. For a private limited company, these obligations include conducting an Annual General Meeting (AGM), appointing an auditor, submitting detailed annual reports and financial statements, declaring deposits, and adhering to tax laws. Annual compliance not only serves as a legal mandate but also plays a vital role in maintaining transparency and accountability. Timely following the requirements build trust with stakeholders and regulatory authorities.
Compliances for a Private Limited Company
The Companies Act, 2013, is the primary statute governing the companies incorporated in India. It prescribes laws and rules that regulate the process of incorporating a company in India, appointment of directors, their qualification, salary, process of issuance of shares, maintenance of financial records, auditing requirements, corporate governance norms, shareholder rights, annual compliance obligations, and procedures for winding up or dissolution of a company.
The Registrar of Companies (ROC), which operates under the Ministry of Corporate Affairs (MCA), regulates the incorporation and functioning of companies in India. Every Pvt Ltd company must file its annual return, financial statements, director KYC, and other essential declarations with the ROC within specified deadlines. Failure to meet these compliance requirements can result in fines, director disqualification, and even the removal of the company’s name from the official register.
Key Annual Compliance for Private Limited Companies in India
A private limited company must adhere to nearly 10 key compliance requirements, which include:
- Conducting Annual General Meeting
- Annual Return Filing - Form MGT-7/7A
- Filing Financial Statement with RoC - Form AOC-4
- Director KYC Submission - DIR-3 KYC
- DIR-12 (if there is any change in directorship in the company)
- Declaration of Deposits - Form DPT-3
- ADT-1 (if a new auditor is appointed)
- Maintain books of accounts
- Filing Income Tax Returns (ITR-6)
- Filing GST Annual Return (GSTR-9)
1. Conduct Annual General Meeting (AGM)
Section 96 of the Companies Act, 2013, mandates that every company hold its AGM within six months of the close of the financial year. Newly incorporated companies are required to hold their first AGM within nine months of the end of the first financial year. The AGM enables the shareholders to discuss and approve the financial statements, auditor’s report, declaration of dividends, and appointment or re-appointment of auditors. It is pertinent to note that the Annual General Meeting will be held during the business hours between 9:00 AM to 6:00 PM on any day other than a national holiday at the company's registered office or at some place where the registered office address of the company is located.
2. Annual Return Filing (MGT-7/7A)
Section 92 of the Companies Act, 2013, mandates that every company shall prepare and file an annual return at the end of each financial year. The yearly return contains the information regarding:
- Its registered office, principal business activities, holding, subsidiary, or associate companies (if any).
- Details of the company’s share capital, including changes in shareholding during the year.
- Details of directors and key managerial personnel, including their remuneration and any changes such as appointments or resignations.
- Summary of the share distribution, including details of equity, preference shares, and any debentures or securities issued.
- Information regarding any deposits received, loans taken, or financial obligations
- Penalty or punishment imposed on the company or its directors and details of compounding offence and appeals made by the company
Form Variants: MGT-7 Vs MGT-7A
|
MGT-7 |
MGT-7A |
|
It is a standard form used by most companies to file their annual return. It requires comprehensive disclosure and is applicable to companies that do not qualify as “small companies” under the Companies Act, 2013.
|
‘Small Companies’ will file an annual return using the MGT-7A form. Small companies are defined as companies other than a public limited company whose paid-up share capital does not exceed ₹4 crores and whose annual turnover does not exceed ₹40 crores. |
Filing Process and Deadline
The annual return must be filed with the Registrar of Companies (RoC) online at the MCA portal within 60 days of the Annual General Meeting (AGM).
3. Filing Financial Statement with the RoC (AOC-4)
Section 137 of the Companies Act, 2013, mandates that every company incorporated in India has to file its audited Financial Statements with the Registrar of Companies (ROC) annually. This filing is done using Form AOC-4. The following documents shall be filed in AOC-4:
- Audited Financial Statements detailing income, expenses, profits, and losses incurring in a year
- Detail of cash inflow and outflow over the financial year
- Statement of subsidiaries as per section 129 – Form AOC-1
- Corporate Social Responsibility of the Company
- Secretarial Audit Report
- Statement of Subsidiaries
- Independent Auditor’s Report that confirms that the financial statements are true.
Filing Process and Deadline
The completed Form AOC-4 and the applicable fees are submitted electronically through the Ministry of Corporate Affairs (MCA) portal. It must be filed within 30 days from the date of the Annual General Meeting (AGM).
4. Director KYC Submission (DIR-3 KYC)
The Companies Act, 2013, requires all company directors holding DIN to update their personal and professional details on the Ministry of Corporate Affairs (MCA) portal using DIR-3 KYC. The following information shall be disclosed in the DIR-3 KYC form:
- Full name, date of birth, residential address proof, contact number, e-mail address of the directors,
- Recent passport-sized photograph of the director
- Aadhar card of the director
- Digital signature certificate of the director
For first-time filings, directors must submit their DIR-3 KYC form via the MCA portal. If a director’s contact number and personal information remain unchanged, the DIR-3 KYC Web form will be used afterward. However, if any details have changed, the standard DIR-3 KYC form must be filed. The last date to file the DIR-3 KYC form with the MCA is 30th September each year.
5. DIR-12 (if there is a change in the board of directors of the company)
The Companies Act 2013 mandates that if there is a change in the board of directors of a company, like resignation or removal of a director, it must be informed to the Ministry of Corporate Affairs (MCA). DIR-12 includes the updated personal and professional details along with the DIN of the existing directors along with new (if there exist any). DIR-12 form must be filed within 30 days from the change in directorship of the company.
6. Return of Deposits (Form DPT-3)
If a Private Limited Company has accepted deposits during the financial year, it must file the DPT-3 form online on the MCA portal. The form was not initially introduced in the Companies Act, 2013. Via notification dated 22.01.2019, the MCA mandated the private companies to disclose all the deposits received in a financial year by or before 30th June to ensure transparency with the RoC and stakeholders.
The following amounts are not considered deposits under the relevant rule:
- Money received directly from the government or backed by it, including funds from foreign governments or banks.
- Loans or credit facilities from public financial institutions, insurance companies, or banks.
- Funds are transferred from one company to another.
- Money obtained through securities subscriptions or advance calls.
- Amounts provided by a director or a director’s relative if they held the position at the time of the transaction.
- Sums received from an employee, as long as it does not exceed the employee’s annual salary (for instance, as a non-interest-bearing security deposit).
- Advances received for business purposes, such as for supplying goods or providing services, or security deposits to ensure contract performance.
- For startup companies, a convertible note of ₹25 lakh or more received in a single installment.
- Funds raised through the issuance of secured bonds or debentures (with a first charge) or non-convertible debentures that do not encumber the company’s assets.
- Unsecured loans from promoters.
- Money received from a Nidhi Company or via chit subscriptions under the Chit Funds Act, 1982.
- Amounts received from collective investment schemes, alternative investment funds, or SEBI-registered mutual funds.
- Any other funds that do not fall under the definition of a deposit as per Rule 2(1)(c).
7. ADT-1 Form if New Auditor is Appointed
ADT-1 is the form used to notify the Registrar of Companies (ROC) about the appointment of a new auditor. Under the Companies Act, 2013, filing an ADT-1 is mandatory when a company appoints a new auditor. The form must be filed within 30 days from the date of the auditor's appointment.
8. Maintain Books of Accounts
Under Section 96 of the Companies Act, 2013, the Managing Director, the Whole-time Director who is in charge of finance, the chief financial officer, or any other person designated by the Board is responsible for maintaining accurate and up-to-date books of accounts, including receipts, expenditures, sales, purchases, assets, and liabilities. The company must store records at the company's registered office. If accounts are maintained elsewhere, the company must notify the RoC by filing the AOC-5 form within 7 days.
9. Filing Income Tax Returns (ITR-6)
Section 139(1) of the Income Tax Act, 1961, mandates that every company registered as per the Companies Act, 2013, file its Income Tax Return annually. ITR-6 is used by companies other than those that claim exemptions under Section 11 of the Income Tax Act, 1961. It discloses income, deductions, and tax computation. The due date to file the Income Tax Return is 31st July of the assessment year.
10. Filing GST Annual Return (GSTR-9)
Under the CGST Act, 2017, companies with GST registration are required to file annual returns along with monthly or quarterly returns. The annual GST return discloses the following information:
- Details of outward supplies (sales) and inward supplies (purchases) aggregated over the year.
- Input Tax Credit (ITC) availed.
- Tax liability and taxes paid during the financial year
The annual return (GSTR-9) must be filed on or before 31st December of the subsequent financial year.
Due Date for Annual Compliances
|
S. No. |
Annual Compliances |
Due Date |
|
1. |
Annual General Meeting (AGM) For Newly Incorporated Companies |
Within six months of the close of the financial year. The first AGM should be held within nine months of the end of the first financial year. |
|
2. |
Annual Return Filing (MGT-7/MGT-7A) |
Within 60 days after the AGM. |
|
3. |
Filing of Financial Statements (AOC-4) |
Within 30 days after the AGM. |
|
4. |
Director KYC (DIR-3/DIR-3 KYC Web) |
30th September each year |
|
5. |
Change in Directorship (DIR-12) |
If there is any change in the BOD, the DIR-12 must be filed within 30 days of the change. |
|
6. |
Return of Deposits (DPT-3) |
On or before 30th June of the financial year |
|
7. |
New Auditor Appointment (ADT-1) |
Within 30 days from the appointment date. |
|
8. |
Income Tax Return (ITR-6) |
31st July of the assessment year |
|
9. |
GST Annual Return (GSTR-9) |
31st December of the subsequent financial year |
Why Choose Kanakkupillai?
Kanakkupillai is a top service provider for annual compliance for Private Limited Companies, giving complete solutions to ensure your company stays legal and avoids fines. With experience in company registration, GST, and brand services, Kanakkupillai has established itself as a reliable partner for businesses wanting quick and accurate compliance solutions.
Kanakkupillai's understanding goes beyond yearly registration, with a strong focus on business creation, GST, and brand services. This range of knowledge and experience makes us a valuable partner for companies wanting full help for their regulatory and legal needs.
In addition to their knowledge, Kanakkupillai provides a user-friendly online tool for filling out forms on the MCA V3 system. This tool simplifies the process of filing forms at MCA, ensuring that companies can easily handle the difficulties of legal compliance.
Our solutions, knowledge in various areas of business compliance, and user-friendly online platform make us an excellent choice for companies seeking reliable and efficient annual compliance services for their companies. By picking Kanakkupillai, businesses can rest assured that their compliance needs are in capable hands, with a team of professionals dedicated to ensuring compliance and avoiding fines.
Frequently Asked Questions
What constitutes annual compliance for a private limited company in India?
Annual compliance refers to the set of mandatory legal obligations that a private limited company must fulfill each year. These include filing annual returns and financial statements, conducting AGMs, and adhering to tax regulations.Why is it essential to conduct an Annual General Meeting (AGM)?
An AGM provides a platform for shareholders to receive updates on the company's performance, approve financial statements, declare dividends, and make crucial decisions.Is it mandatory to appoint an auditor for a private limited company?
Yes, every private limited company must appoint a qualified auditor to conduct an annual statutory audit of its financial statements and comply with the provisions of the Companies Act, 2013.How does timely compliance benefit a private limited company?
Adhering to compliance enhances the organization's credibility and reputation, attracts potential investors, and ensures eligibility for financial assistance from banks and financial institutions.What is the role of the Director Identification Number (DIN) in compliance?
A DIN is a unique identifier for directors. Directors must annually update the KYC details associated with their DIN to remain compliant and avoid deactivation.Can non-compliance affect the personal liability of directors?
Yes, directors can be held personally liable for non-compliance, facing fines up to ₹5000 and disqualification from holding directorships.What records should a private limited company maintain for compliance purposes?
Companies should maintain accurate records of financial transactions, meeting minutes, statutory registers, shareholder details, and correspondence with regulatory authorities to ensure compliance and facilitate audits.What makes Us Different
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