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Mandatory Annual Compliance For Private Limited Company

Private Limited Company are the most popular form of starting a business in India currently. Every Private Limited Company registered in India must ensure that they meet the compliances with respect to the Companies Act 2013.

Compliance refers to ‘action to complying with the law’. There are certain legal formalities that one needs to fulfil after the incorporation of a Private Limited Company. It means that the company is obeying all the laws and regulations to manage the business operations.

These compliances are to be duly met irrespective of the company’s annual turnover. In case of any failure, the company would be eliminated from the register of Registrars of Companies (RoC).

Annual Compliances to be maintained by the Private Limited Company

The common compliances which a private limited company has to mandatorily ensure are:

i) Commencement of business within 180 days of incorporation of the company

Every registered private limited company with the required share capital shall obtain a commencement of business certificate before official comment of the business or exercise of any powers coming from the incorporation of the company.  The commencement of business must start within 180 days of incorporation. 

ii) Appointment of Auditor

One of the first orders of business after having obtained your company’s Certificate of Incorporation is the appointment of the first auditor of the company. Within 30 days from the date of registration of the company, the board of directors must call a board meeting and appoint an auditor for the company. In case the board fails to appoint an auditor within the above timeline, it is required to inform the members of the company, who may then within 90 days of such intimation, appoint the first auditor of the company at an extraordinary general meeting. Auditor will be appointed for the 5 (Five) years and form ADT-1 will be filed for 5-year appointment.

iii) Disclosure of Directors Interest by Directors

Every Director of the Company in First Meeting of the Board of Director in each Financial Year shall disclose his interest in other entities.

  • Directorship of other company
  • Partnership firm where he/she is partner
  • Shareholding of more than 2% in other Company
  • List of relatives of Director

Every first Board Meeting of the of relevant Financial year Every Director is required to submit with the Company a fresh MBP-1, whenever there is change in his interest from the earlier given MBP-1 MBP-1 is not required to file with ROC

iv) Statutory Audit of Accounts

Every Company shall prepare its Accounts and get the same audited by a Chartered Accountant at the end of the Financial Year compulsorily. The Auditor shall provide an Audit Report and the Audited Financial Statements for the purpose of filing it with the Registrar.

v) Filing of Annual Return (Form MGT-7)

A Private limited company is required to hold an annual general meeting. They are required to keep their general meetings in six months in a financial year. Such meetings should take place during business days and not public holidays where such a meeting shall be conducted in the city where the registered office is situated. 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 1st April to 31st March.

vi) Filing of Financial Statements (Form AOC-4)

Company is required to file its Balance Sheet along with Statement of Profit and Loss Account, Cash flow statement, Directors’ Report and Auditors’ Report in this form within 30 days of holding of Annual General Meeting. Criteria for XBRL Filling

  • If paid up capital is more than Rs. 5.00 Cr. or
  • Turnover is more than Rs. 100.00 Cr.

Every Private Limited Company is required to file its Balance Sheet along with statement of Profit and Loss Account and Director Report in this form within 30 days of holding of Annual General Meeting.

vii) Board meetings

A board meeting shall be conducted within 30 days of incorporation of the company. A minimum of 2 directors or 1/3rd of the total number of directors shall be present at the Board meeting. Moreover, notice in advance should be given to the members attending such meetings. The notice shall include the date and timing of the meeting and should be given at least seven days in advance.

viii) Income tax

All the Private limited companies shall file their income tax return before the due date of every financial year. The private limited companies are required to make the quarterly payment of the advance taxes. Moreover, if the company’s gross receipts exceed Rs 1 crore in the previous financial year, a tax audit is filed by such a private limited company.

ix) Other compliances

There can be specific instances apart from the annual filings. In such a case, the company must file a different form for that particular event with the registering officer within a specific period of time as may be prescribed by the Companies Act, 2013. 

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Note: This Post was last updated on January 17, 2023

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