There are types of companies in existence. One of the recognized types of businesses is a private limited company. In India, these companies are governed by the Companies Act. Overseen by the Ministry of Corporate Affairs (MCA). Through this article, we will learn about the mandatory annual compliances of a private limited company, outlined in the Compliance Calendar for a Private Limited Company. As per the rules and orders by the Ministry of Corporate Affairs (MCA), it is mandatory for every private limited company to file its ROC compliance and manage other secretarial compliance filings.
Comprehensive Guide to Annual Compliance Calendar for Private Limited Companies
Here’s a comprehensive guide to annual compliance for Private Limited Companies:
Maintenance of Statutory Registers:
Private limited companies are obligated to meticulously maintain a range of statutory registers in accordance with the provisions set out in the Companies Act. These tasks form a crucial part of the Compliance Calendar for a Private Limited Company. These registers encompass crucial aspects such as details of members, directors, charges, and debenture holders.
To adhere to regulatory requirements, it is imperative that these registers are not only consistently updated but also securely stored at the company’s designated registered office. This practice ensures both transparency and accountability, as authorized entities can access and review these records to verify the company’s compliance with statutory norms.
Financial Statements:
Furthermore, as part of the Compliance Calendar for a Private Limited Company, private limited companies are also mandated to prepare these statements in accordance with the applicable accounting standards. This entails creating the balance sheet, profit and loss statement, and cash flow statement. By aligning these statements with established accounting standards, companies ensure the accuracy, consistency, and comparability of their financial information, fostering transparency and facilitating informed decision-making for stakeholders.
Appointment and Rotation of Auditors:
As a crucial part of the Compliance Calendar for a Private Limited Company, these firms must adhere to regulations governing auditor appointment and rotation outlined in the Companies Act. This safeguards auditing independence and integrity.
Annual Return Filing (Form MGT-7):
Moreover, within the realm of the Compliance Calendar for a Private Limited Company, private limited companies are required to furnish details about alterations in the shareholding pattern, director particulars, and remuneration of key managerial personnel through the submission of Form MGT-7. This ensures comprehensive disclosure and transparency in corporate governance.
Functions of Registrar of Companies
Within the Compliance Calendar for a Private Limited Company, it’s noteworthy that India currently has 22 Registrars of Companies. The Registrar of Companies (ROC), established under Section 609 of the Companies Act 2013, plays a pivotal role in overseeing compliance with the Act’s provisions. One of the primary duties of the ROC is to scrutinize whether private limited companies adhere to the Act’s requirements, reinforcing regulatory compliance. There is a registry handled by the registrar that records all companies registered with them.
Now that we are aware of this topic, it is time to check the ROC compliances of a private limited company:-
Board Meeting
Addressing board meetings, it’s imperative for a private limited company, as part of its Compliance Calendar for a private limited company, to conduct a minimum of two meetings annually. In contrast, public limited companies are mandated to hold four meetings per year. These sessions necessitate the presence of directors, either amounting to at least one-third of the total director count or a minimum of two directors. This practice fosters robust governance and facilitates informed decision-making within the company.
Within the Compliance Calendar for a Private Limited Company, advance notice—usually 7 days—must precede such meetings, detailing the agenda. Notably, the company’s registered office is designated as the repository for meeting minutes, fostering organized record-keeping.
Annual General Meeting
Within the Compliance Calendar for a Private Limited Company, an Annual General Meeting (AGM) is a mandatory event, occurring annually. If a company holds two AGMs, they should be spaced around 15 months apart. AGMs primarily center on financial statements, while also addressing auditor appointments, dividend declarations, and remuneration matters. This framework upholds transparency and regulatory compliance.
Appointment of Auditor (FORM ADT-1)
Within the framework of the Compliance Calendar for a Private Limited Company, another essential obligation is the prompt appointment of an auditor within 30 days of the company’s incorporation. Moreover, if a new auditor is appointed, Form ADT-1 needs to be submitted to the Registrar of Companies (RoC) within 15 days following the Annual General Meeting. This procedural adherence underscores financial accountability and regulatory fulfillment.
Director Disclosure
There are director disclosures as well in a company wherein they are required to file Form MBP-1 to show their interest in other companies. This disclosure needs to be done every year at the first board meeting itself. It is mandatory that the director of a company in every financial year needs to record the company disclosure of non-disqualification in Form DIR-8. In addition, the qualifications of the new director should be considered a declaration at the time of their appointment.
Auditing by a Statutory Auditor
Each and every company should have the statutory auditor as well so that the financial reports can be audited timely and annual reports are verified or prepared accordingly.
Let’s have a look below at some of the form filing procedures and the details required to file such forms.
FORM MGT-7
Within 60 days of the date of the Annual General Meeting, every business has MGT and it should contain the following information:-
- Information about the board and member meeting
- Registered office and principal place of business of other holdings and associate companies
- Debenture holders and members,as well as the changes made
- Key managerial personnel, directors, and promoters, as well as mention of the changes made
- Remuneration of directors and key managerial personnel
- Information about any penalty or fine imposed on the company
- Information about the company’s shareholding pattern
- Debentures, shares, and other securities
- Liability or indebtedness
In the event of a dispute or other issue, the public will be able to view these particulars. If there exists any default in documenting the yearly return, a fine of ₹100 will be forced each day of default.
FORM AOC-4 (Filing of Financial Statements)
This document serves as a means of communication between the company directors and its shareholders. It provides the shareholders with information about their investments and other financial activities throughout a year. It is mandatory to do the same within the time period of 30 days from the date of annual general meeting.
- The audit report and any other miscellaneous transactions (both directors’ and secretarial audits)
- Information regarding the auditor and board meeting ought to be filed
- Details of the particulars on the balance sheet,
- Corporate social responsibility
- Details of related party transactions entered into by the company.
Audit Accounts
Furthermore it is mandatory for companies to have their accounts audited by Chartered Accountants at the conclusion of each year. These financial statements must then be submitted to the registrar.
Statutory Registers
It is one of the most crucial requirements as well wherein minutes of board meetings, AGM, meetings of creditors, debenture holder meetings, and maintaining statutory registers are considered respectively.
Other Compliances of a Private Limited Company
In addition to the mandatory compliances of a Private Limited Company registration mentioned above, other such necessary compliances are described below:-
- Payment of TDS,
- GST, and the filing of a GST Return
- Other periodic dues payments
- Filing of quarterly TDS returns
- Advance tax payments
- Filing of IT returns
- Filing of tax audit reports
- Tax audits
End Note
In wrapping up this discussion, the article has provided an in-depth exploration of crucial aspects related to a private limited company and its alignment with the Compliance Calendar for a Private Limited Company. Covering essential documentation prerequisites, operational functions, and key concepts, the article ensures a thorough understanding of all pertinent facets within this compliance framework.
