Private Limited Company Compliance

Compliances to be followed by a Private Limited Company in India

Generally speaking, a company is a corporate entity formed by a group of people. Statutory compliance checklists for private limited companies and other entities are also established by law and have been discussed below. Following incorporation, your business must adhere to a number of compliance requirements, including yearly general meetings, board meetings, income tax filing, and auditor appointments.

What Do Compliances Mean for a Company?

"Action to comply with the law" is what compliance refers to. After a Private Limited Company is incorporated, a few legal requirements must be met. It indicates that the business is managing its activities in compliance with all applicable rules and regulations.

You may be subject to legal penalties if you perform all of the firm compliances, as some formalities must be completed annually.

What Statutory requirements must be met by a company in India?

It is important to grasp the idea before delving into the specifics of legal compliance checklists for Indian businesses. Statutory refers to laws and regulations, while compliance denotes following or observing them. For the benefit of its workforce, a corporation must abide by various government restrictions. To avoid any issues with regulatory compliance, one should be aware of the other setup and monthly compliance for private limited companies.

Numerous laws, introduced by the Ministry of Corporate Affairs or other entities, mandate that corporations maintain sound operations. A quick explanation of a few of those significant statutes is provided below:

1. The Factories Act of 1948 was a piece of legislation aimed at protecting the health, safety, and welfare of workers working in factories or other manufacturing units.
2. The Employees Provident Fund (EPF) Act of 1952 contains provisions pertaining to an employee's security upon retirement.
3. The 1948 Employees' State Insurance (ESI) Act provides health and safety safeguards to protect workers from workplace hazards.
4. State laws known as the Professional Tax Act: A few Indian states, like Telangana and Maharashtra, have levied taxes on a number of occupations, including trades and employment.
5. States like Punjab, Maharashtra, and Haryana use state laws known as the Labour Welfare Fund Acts to fund specific initiatives aimed at improving worker welfare.
6. Maternity Benefit Act, 1961: This law provides specific benefits to protect women's employment during pregnancy.
7. The Contract Labour (Regulation and Abolition) Act of 1970 was enacted to safeguard contract workers and ensure their workplace safety. 
8. The goal of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act of 2013 is to safeguard women from offensive behaviors and comments made in the workplace and to establish a secure work environment.
9. The 1948 Minimum Wages Act established minimum wage rates for a number of occupations.
10. Payment of Wages Act, 1936: Clauses governing wage periods and offering protection from unauthorized or inexplicable deductions. 
11. The Payment of Gratuity Act of 1972: This Act mandates that businesses in specific industries give departing employees a one-time gratuity.
12. Payment of Bonus Act, 1965, requires employers to set a minimum and maximum bonus percentage based on the company's profits.
13. The Equal Remuneration Act of 1976: This law forbade gender-based discrimination in the workplace.

India has a history of using bonded labour and exploiting its people. The government has repeatedly introduced a list of statutory compliances for Indian corporations to stop these wrongdoings. The corporation wants to ensure that all labour laws in India are followed for the benefit of its workers. A list of statutory compliance is also crucial for the company's commercial operations and the well-being of its clients. Numerous needless fines and monetary losses can arise from failing to comply with the list of statutory compliances for Indian companies. 

Annual Compliance

A company registered in India must follow the various annual legal requirements set forth by the corporate body of legislation, such as the Companies Act, 2013. 

1. Declaration of Commencement of Company

In order to start doing business, every company must now file e Form INC-20A with the Registrar of Companies 180 days after incorporation.

2. First Board Conference

The Board of Directors must convene for the first time within 30 days of the company's incorporation. Every director shall receive a notice of BM at least seven days before to the meeting.

3. The first auditor

Within thirty days of the company's incorporation, the BOD will designate the first auditor, who will serve in that capacity until the end of the first annual general meeting. The filing of ADT-1 is not required in the case of the First Auditor.

4. Share Certificate Issuance

The subscribers to the memorandum must obtain Share Certificates from the company within sixty days of its incorporation.

5. Directors' Disclosure of Interest Form Submission

Each and every director at

• The initial gathering where he serves as a director; or
• The first board meeting of each fiscal year; or
• When disclosures change, 

the individual must report any concerns or interests in any company, body corporate, firm, or other organization of individuals (including shareholding interest) in Form MBP-1, together with a list of relatives and the concern of relatives in the Company as defined by the RPT.

Form MBP-1 must be maintained in the business's records.

6. Following Board Sessions

There must be a minimum of four board meetings held annually, separated by no more than 120 days. It is adequate for small companies to hold just two board meetings.

7. Following Auditor

The BOD will appoint the auditor at the firm's first AGM and maintain the position until the end of the sixth AGM. The auditor will then report this information to the ROC by filing an ADT-1. Within 15 days of the appointment date, the company, not the auditor, is responsible for filing Form ADT 1.

8. Annual General Meeting

Every company must have its annual general meeting by September 30th, at the latest, between business hours (9 a.m. to 6 p.m.), on a day that is not a public holiday, and either at the company's registered office or in the town, city, or village where its corporate headquarters is located. It is necessary to give a clear 21 days' notice for the same.

9. Financial Statement Submission

All companies must submit their financial statements to the company's registrar using E-Form AOC-4 within 30 days following their annual general meeting. One director must digitally sign the document and be certified by a CA, CS, or cost accountant in practice.

10. Annual Return Submission

All companies must submit their Annual Return in E-Form MGT-7 to the Registrar within sixty days following their Annual General Meeting. A practicing certified public accountant must certify a corporation with a turnover of at least INR 50 crore using Form MGT-8.

11. Report on Directors

Within 30 days following the AGM, the Directors' Report and Form AOC-4 covering all the information necessary for Small Companies under Section 134 must be filed.If the "Chairperson" has not received the approval of at least two Directors, it should be signed by the Board.

12. Foreign company financial statements 

Every foreign company must file its annual accounts (consolidated financial statements, also known as global accounts) and a list of all of its primary locations in India within six months of the financial year's end.

13. Foreign company filing of its annual return.

Within 60 days of the fiscal year's end, each foreign business must compile and submit its annual report on Form FC-4.

Compliances Based on Events

Any changes made inside a private limited company must be reported to the Registrar of Companies (ROC). 

1. Director transformation (DIR-12) Section: 149

A Private Limited Company that modifies its directors, including by appointing a new director, removing or resigning an existing director, or changing a director's designation, must notify the Registrar of Companies (ROC) of the changes by filing Form DIR-12 no later than 30 days after the changes were made.

2. Modification of the permitted share capital (FORM SH-7) 

A private limited company must file Form SH-7 within 30 days of passing the normal resolution to notify the Registrar of Companies of any changes to its authorized share capital.

3. Registered office change (FORM INC-22) 

A Private Limited Company must file Form INC-22 with the Registrar of Companies (ROC) within fifteen days of the date of any change to its registered office address. 

4. Paid Up Capital Increase (FORM PAS-3) 

When a newly incorporated firm allot fresh shares to a new shareholder, Form PAS-3 is filed with the ROC. It must be submitted within fifteen days of the share allocation date.

5. [FORM CHG-1 / CHG-9)

Every time a charge is created or modified on any company's assets, CHG-1/CHG-9 are submitted with the Registrar of Companies. While CHG-9 is particularly submitted for debentures only, CHG-1 is filed in such circumstances of charges created or changed on all assets other than debentures.  Within 30 days following the formation of the charge, CHG-1 and CHG-9 are both submitted to the ROC.

6. Renaming the company (INC-24)

 If a business wants to alter its name and the Registrar approves it, Form INC-24 must be submitted to the ROC. It must be filed within 60 days of the Registrar approving or reserving the company's new name or within 30 days of the corporation passing a Special Resolution adopting the new name, whichever comes first.

7. (FORM BEN-2)

The corporation files Form BEN-2 with the Registrar of Companies, revealing the particulars and interests of its Significant Beneficial Owners. After the company gets BEN-1 from its beneficial owners, it has 30 days to file BEN-2, which discloses the owners' specific interests to the company.

8. (FORM AOC-5)

All companies are required to retain bookkeeping records at their registered office. However, the corporation must notify the ROC using Form AOC-5 if it chooses to retain these data at an office other than its registered office. Within seven days of the firm passing a resolution approving its choice to maintain its account books at the concerned office address, Form AOC-5 must be submitted to the ROC. 

If the relevant company violates any of the compliance, a daily penalty is assessed. If any form is not filed on time, you will be responsible for paying additional fees. The longer the wait time, the higher the fee becomes.

Fortunately, there are reputable and capable experts available in the market today who are prepared and eager to assist you at any point in the business cycle, including incorporation and all subsequent compliance and regulatory needs throughout your organisation's lengthy existence. To receive the best assistance possible for your Private Limited Company compliance requirements, contact Lawgical Adda right now.