Essential Compliance for Private Limited Company- Check If You Have Followed All!
Managing a company is tough. Following the compliance for private limited company is tougher. A company has to look after its product line, innovation, marketing, finance, human resources, and above all compliance. There are various compliance for Private Limited Companies that they have to follow under various Acts. The companies are incorporated under the Companies Act, 2013. This Act mentions various compliances that the company has to follow on a monthly, quarterly, or yearly basis. The Income Tax Act and the Goods and Services Act have specified various compliance requirements, too.
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Compliance can surely take up a lot of time for the management. Read below to understand everything about the compliance for Private Limited Companies.
What is a Private Limited Company?
Before understanding the compliance of a Private Limited Company, let us understand what a Private Limited Company is.
Section 2(68) of the Companies Act, 2013 states that any company having a minimum prescribed share capital as may be prescribed and has:
- Restricted the right to transfer its shares,
- Limits the number of its members to 200
Shall be treated as a Private Limited Company.
A shareholder of a Private Limited Company is protected with limited liability. The members are liable to pay losses only up to the extent of their shareholding. The member’s assets are safeguarded from the company’s financial losses. The company has to use ‘Private Limited Company’ or ‘Pvt’ as a suffix to their name.
A Private Limited Company, too, is a separate legal entity and is treated differently than its owners. As a legal entity, it can own property, enter contracts, and have the power to sue or be sued. A Private Limited Company must have at least two directors, out of which one should be an Indian citizen.
Now let’s understand the compliance of a Private Limited Company.
ROC Compliance for Private Limited Company
There are various private limited company compliances as per companies act 2013. Some of them are followed before the incorporation whereas a few compliance after incorporation of private limited company. The compliance is looked after by the Registrar of Companies (ROC).
These obligations should be fulfilled by the company by rules, regulations, and procedures as established by the ROC. Ensuring that these procedures are essential for the company. This will make sure that compliances for private limited company under companies act 2013 are followed. Some of these compliances are:
- Situation-based compliance: These situations include changes in the company’s management, delays in mandatory proceedings of the company, etc. INC 20 A is filled before the commencement of business.
- Change in the Memorandum of the Company: These include alteration in the name, change of registered office, or alteration in object, liability, capital, or authorized capital clause.
- Change in Articles of Association: The Articles are the relationship of the company with its employees. Any change in the AOA will have to be registered with the ROC.
- Change in members or membership: The company law compliance for share transfer of private limited company falls under this category.
- Other compliances: This may include compliances for maintaining the company’s legal status such as KYC updates and maintenance of statutory registers.
What is the annual compliance for private limited company in India?
Private limited company annual compliances include filing their annual returns and other important particulars. Discharging yearly compliance of a private limited company is essential for their survival. Any form of delay may result in penalties and restrictions on the company. These compliance are followed by login on the MCA portal. The annual compliances to be done by a private limited company are:
Form ADT-1:
Auditors must be appointed in the Annual General Meeting and form ADT-1 must be filled with the ROC within 15 days of the appointment.
Board Meetings:
Board Meetings should be held within 30 days from the end of the first financial period. Subsequently, it can be held within 120 days from the end of the financial period.
Annual General Meeting:
An AGM should be held every year within six months from the end of the financial period. Annual reports and other significant matters like the appointment of auditors are held in it.
AOC-4:
The company’s financial statements are filled in form AOC-4 within 30 days from the day the AGM was held.
MGT-7:
Company’s Annual Returns are filled in MGT-7 within 60 days from the AGM. This is an important compliance for a private limited company.
Tax Compliances for Private Limited Company
Income tax returns of the company shall be filed every year irrespective of their income, whether profit or loss. The due date for filing the return shall be 30th September every year. Eligible companies shall also have to register under the GST Act and fill out monthly quarterly and annual returns.
Basic Labor Law Compliance for Private Limited Company
Complying with labor laws in a private limited company sets the foundation for the treatment of labor in a workplace. The labor force, that is employees plays an essential role in any workplace. Private Limited Companies depend completely upon their employees to manage their work. That is why it is necessary to ensure that the employee’s and worker’s rights are safeguarded. Any kind of injustice against them should not be tolerated. It is important to make sure that they get rightful consideration and enough leave for their work. To ensure that the workers get the respect that they deserve, it is essential to follow the basic labor law compliance for private limited companies. Some of them are:
- Minimum Wages Act, 1948
- Trade Unions Act, 1926
- Payment of Wages Act, 1936
- Payment of Bonus Act, 1965
- Employment Compensation Act, 1923
Compliance Calendar for Private Limited Company.
Compliance for a private limited company in India can be summed up in the following calendar:
| Date | Compliance |
| Tax return due date | 31st October for the next Financial year |
| GSTR 7 and 8 (monthly) (Quarterly dates shall vary) | 10th of the following month |
| GSTR 1 (monthly) (Quarterly dates shall vary) | 11th of the following month |
| GSTR 5A | 20th of the succeeding month |
| GSTR 4 | 30th April |
| Commencement of Business | Within 180 days of incorporation |
| ADT 1 | 15 days after AGM |
| INC 20A | Within 180 days of incorporation |
| Filling of Financial statements | Within 30 days of AGM |
| Filling of Annual Return | Within 60 days of AGM |
| Directors report | At least 21 days before the AGM |
You can use this as a compliance checklist for a private limited company. If this compliance is taking a toll on you, leave behind the stress to us. Lawgical Adda helps you follow all these compliances easily. With our team, you
FAQs
1. What is the non-compliance penalty?
A non-compliance penalty is a fine charged to private limited companies for not completing their compliance. The amount of this penalty and punishment may vary according to compliance. This penalty may extend to punishments as well.
2. What is compliance in a private limited company?
Compliance refers to following laws or rules that are mandatory and essential for the company. Some of this compliance is mandatory to all private limited companies whereas, some apply to only a few of them. For instance, filing Income Tax returns is mandatory for all PVTs.
3. What is ROC compliance for Private limited companies?
Compliance refers to following laws or rules that are mandatory and essential for the company. There are various compliances that PVTs have to follow as per the Companies Act 2013. Some of them are followed before the incorporation whereas a few comply after the incorporation of a private limited company. The compliance is looked after by the Registrar of Companies (ROC). These registrations, laws, and rules that are looked after by the ROC are known as ROC compliance. These are also called statutory compliance for private limited company.
