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Benefits of Taxapillar

At Taxapillar, we offer professional guidance and assistance in business ethics to ensure Private Limited Company Compliance. With our reliable support, you can have a dedicated team overseeing all aspects of your company's Annual Compliance, ROC filing, ITR filing, and maintaining its active status through regular filing with MCA. Partner with us to ensure smooth and efficient company operations.

Annual Compliance Checklist to Ensure Private Startup Success

Private limited companies have to comply with various legislative acts and administrative bodies while filing returns. This includes periodic filings of returns, taxes, and other documents, organizing board and other meetings, and keeping sanctioned books and accounts secured.

The following are mandatory tax-related responsibilities that taxpayers must adhere to, and non-compliance may result in penalties:

- Payment of TDS & TCS, as well as GST liability, is compulsory.

- Timely submission of periodic returns (annual, quarterly, monthly) for GST, TDS, etc., is required.

- GST returns must be filed monthly or quarterly.

- TDS returns must be filed quarterly.

- Advance tax must be evaluated and paid periodically.

- Authorized CA must file the tax audit report.

- A flat rate of 30% for Education Cess will be added to the income tax returns filing.

- Compliance assessments for various acts, including Environment Protection Act, Competition Act, Money Laundering Act, and Factory Act, will be conducted.

 Advantages of Maintaining Yearly Compliance

 Enhance the credibility of your company

- Compliance of law is a basic requirement for any company/business

- Annual return filing date is displayed on MCA portal

- Regularity in compliance increases organization credibility

- Compliance of return is a major criterion for loan approval, government tenders, and other functions

Draw investors towards your business

- At first point investors look for financial records and data before investing in a company

- They may approach the company directly or check records on the MCA portal

- Maintaining Regular compliance records are preferred by investors

- Private limited companies are also targeted by investors for investment opportunities

Stay actively engaged in the business

- Filing annual returns regularly helps private companies avoid penalties and legal issues.

- Failure to file returns continuously leads to default status and heavy penalties.

- Companies may be declared inoperative or removed from the Register.

- Directors may be debarred and disqualified from further appointments.

- An additional penalty fee of ₹100 per day will be levied from July 2018 until the date of filing.

What are the consequences of Non-Compliance for Private Limited Companies?

Non-compliance by private limited companies will not be tolerated. Any refusal to comply with administrative requirements will result in fines for the company and any officers responsible for the default. The longer the non-compliance persists, the greater the fines will accumulate.

What are the main annual compliances of a private limited company need to follow?

Private Limited companies must ensure the following mandatory agreements:

·         The first meeting of the board of directors must be held within one month or 30 days of the company's incorporation. The declaration of the meeting must be formally communicated or sent to each director at least seven days prior to the meeting. All directors are required to attend the meeting.

·         The company must hold at least four board meetings each year, with a maximum gap of 120 days between meetings. Whenever a director joins or at the first meeting each fiscal year, they must file an acknowledgement of interest disclosing their interests in any related entities. This disclosure should include a list of any relatives and their involvement in the company under related party transaction (RPT) definition. This disclosure should be filed on Form MBP-1 and kept in the company's records.

·         After a company is incorporated, the Board of Directors must appoint a First Auditor within 30 days. This auditor will hold the position until the first Annual General Meeting (AGM) is held. It is important to note that there is no need to file an ADT-1 for the First Auditor.

·         In the first Annual General Meeting (AGM) of a private limited company, the Board of Directors (BOD) must assign an Auditor who will hold the position until the 6th AGM. The assignment must be filed with the Registrar of Companies (ROC) using Form ADT-1 within 15 days of the Auditor's designation. The content of the form is provided by the Private Limited Company, not the Auditor.

·         Private limited companies are required to hold an Annual General Meeting on or before September 30th every year during office working hours. The meeting should take place at the registered office of the company and a 21-day notice should be given. If the day is not a public holiday, the meeting can be held within the village/town/city where the registered office is located.

·         Private Limited Companies must file their Annual Return within 60 days of the Annual General Meeting. The Annual Return must be filed from 1st April to 31st March of every year.

·         Private Limited Companies are required to file their financial statements in Form AOC-4, which includes their Balance Sheet, Director Report, and Profit and Loss Account. This must be done within 30 days of holding their Annual General Meeting.

·         Private Limited Companies must have their financial reports audited by a Chartered Accountant at the end of every Financial Year. This statutory audit is mandatory, and the auditor must provide an Audit Report and Audited Financial Statements to be submitted to the Registrar.

ANNUAL COMPLIANCE: ADDITIONAL REQUIREMENTS

- Private Limited Companies must file a Directors Report covering all relevant information required for a Small Company under Section 134.

- Statutory Registers, including Directors and KMP, Register of Members or Shareholders, Beneficial Owners, Loans, Contracts and Arrangements, Deposits, and Related Parties Transactions must be maintained.

- Other documents like the Directors Report and Auditor's Report must also be included

- Board meeting minutes, AGM or annual general meeting minutes, financial statements, and ROC files must be preserved and updated regularly.

- Private Limited Companies must circulate or send the annual financial statement to members

- This should be done before the AGM and with 21 clear day’s notice 

Detailed concept of event based compliances in a private limited company

A Private Limited Company has event-based compliances that are activated by various steps or consequences, such as a change in directors, approved share capital or registered office. It is vital to track these events and ensure compliance is met with on time to avoid penalties and additional fees. The company must adhere to certain time limits for these event-based compliances or agreements.

• Change of Registered Office
• Needs to be done within 15 days of the change taking place.
• Required Form: INC-22.
• Change in Key Managerial Personnel (KMP) or Directors
• Must be processed within 30 days of the change.
• Required Form: DIR-12.
• Increase in Authorized Share Capital or Investment
• Should be performed within 30 days of authorizing an Ordinary Resolution.
• Required Form: SH-7.
• Filing of Resolutions and Agreements
• Must be executed within 30 days from the date of authorization of the resolution.
• Required Form: MGT-14.
• Increase in Paid-Up Share Capital or Issue of Security
• To be done within 15 days of the date of the allotment.
• Required Form: PAS-3.

·         Company Directors KYC Application
Submission should occur no later than April 30th of the upcoming Fiscal Year or during Annual Compliance. Ref: DIR-3 KYC.

·         Modifications in Secured Borrowing
All types of charges (Creation, satisfaction, and modification) should be reported within 30 days after it has been enacted. Ref: CHG-1.

·         ACTIVE (Active Company Tagging Identities and Verification)
Mandatory by April 25th, 2019. This applies to all companies registered prior to December 31st, 2017. Ref: INC-22A.

·         Business Commencement Declaration
This regulation involves a company's obligation to declare the commencement of its business operations. According to the requirements, such a declaration must be made within 180 days from the incorporation date. Please note, this policy is specifically applicable to businesses incorporated after the 2nd of November in 2018. The relevant document can be referred to as INC-20A.

Essential Actions, Time Limits, and Relevant Forms

Change in Directors or Key Management Personnel (KMP)

A form DIR-12 must be filed within 30 days of any changes occurring in the positions of Directors or KMP.

Increase in Authorized Share Capital

An increase in authorized share capital must be formally reported using form SH-7, and this report should be filed within 30 days of the resolution being passed.

Increase in Paid-up Share Capital or Issue of a Security

In the event of an increase in paid-up share capital, or the issue of a security, use form PAS-3. This must be submitted within 15 days from the date of the allotment.

Change in Secured Funds or Borrowing (Creation, Modification, or Satisfaction of Charge)

Changes regarding secured funds or borrowing, including the creation, modification, and satisfaction of charge, must be reported using form CHG-1. This submission should be completed within 30 days of the event's occurrence.

• Modification of Corporate Structure - Submit INC-27
• Deadline: Ensure submission within 15 days from the date of the corporate structure change.
• Update of Registered Office Address - Submit INC-22
• Deadline: Submit the changed office address details within 15 days of the change.
• Submission of Resolutions and Agreements - Submit the MGT- 14
• Deadline: File the resolutions and agreements within 30 days from the date of authorization.
• Changing the Company Name - Submit INC-24
• Deadline: Submit the Application within 60 days after reserving the new company name in INC-1.
• Early auditor termination - Submit ADT-2
• Deadline: If the auditor is removed before their term ends, submit the details within 30 days of the resolution pass date.

·         Disqualification Report for Director
Companies are required to file this report (DIR-9) within a span of 30 days following the disqualification of a director.

·         Directors KYC Application
This application (DIR-3 KYC) must be completed and submitted either before the 30th of April in the following financial year or during the company’s annual compliance period.