Although Private Limited Company is one of the more popular
ways of starting a business, there are various compliances which needs to be
followed once you continue with your business.
Looking the day to day operations of your business and
complying with the corporate laws is a little too much for the entrepreneur.
Hence, it is essential to get a professional on board also look after the legal
requirements and ensure timely fulfillment of compliances, without levy of
interest and penalty.
Statutory Audit Compliances
The chief aim of a statutory audit is almost
similar to other audits. This helps find out whether an organization is an
exact replica of a financial position as it examines information such as bank
balances, bookkeeping records, and other financial transactions.
Annual RoC Filings
Private Limited Companies need to file its Annual Accounts
and Returns giving it details of its shareholders, directors and so on to the
Registrar of Companies. Such compliances need to be made once in a year.
As a part of Annual Filing, the following forms need to be ROC:
Form MGT-7 (Annual Return): Every Private Limited Company is
required to file its Annual Return within a time frame of 60 days of holding of
Annual General Meeting. Annual Return is from the period of 1st April to 31st
March.
Form AOC-4 for Financial Statements: Each and every Private Company
needs to file the Balance Sheet along with a statement of Profit and Loss
Account and the Director Report in this form has to be submitted within 30 days
of holding of Annual General Meeting.
Annual General Meeting
Every Private Limited Company needs to go into a meeting of
its shareholders once every year within a period of six months starting from
the date of closing of the financial year.
The primary agenda of an AGM is including the approval of
financial statements, declaration of dividends, and the appointment or
re-appointment of auditors and the remuneration of directors, etc.
Board Meetings
The First meeting of the newly appointed Board of Directors
of a Private Limited Company shall be conducted within days starting from the
date of Incorporation of the company.
Further, minimum Four Board Meetings shall be held in a
calendar year (a meeting every 3 months). In case of a Private Limited Company
which is known as a “Small Company”, at least
two Board Meetings shall be held in a calendar year (one meeting quarterly)
Most of the startups fall within the category of “Small
Company” and need to follow certain
compliances such as follows,
1.
Income Tax Compliances
Calculation and Quarterly Payment of Advance Tax
Filing of Income Tax Returns (Tax is payable at a
flat rate of 30% plus Education Cess)
Tax Audit – It is mandatory in case sales, turnover or gross
receipts of a business exceed Rs. 1 Crore in the previous year that is relevant
to the assessment year.
Maintenance of Statutory Registers and Records
Other Event Based Compliances
Filing of Tax Audit Report
Maintenance of Statutory Registers and Records
Besides Annual Filings, there are various other compliances
which need to be done as and when an event takes place in the Company.
Instances of such events are:
transformation in Authorised or Paid-up Capital of the
Company.
Giving Loans to other Companies.
Giving Loans to Directors
Allotment of new shares or transfer of shares
Loans to Directors
Appointment of taking care of the position of whole time
Director and payment of remuneration.
Opening or closing of bank accounts or change in signatories
of Bank account.
Change or Appointment of the Statutory Auditors of the
Company.
Different forms need to be filed with the Registrar for
different events within the specified time periods. In case, it is not done the
additional fees or penalty must be levied. Hence, it is mandatory that such
compliances are met on time.
Non-Compliance
If a Company is unable to comply with the rules and
regulations of the Companies Act, then the Company and all the responsible
officers who are in default shall be punishable with fine.
If there is a delay in any filing, then additional fees are
required to be paid, which keeps on increasing as the time period of non-compliance
changes.
