Annual Compliances & ROC Filings
Expert Guidance on Compliance for Private Limited Companies
Navigating compliance can be challenging for private limited companies in India due to the detailed requirements of the Companies Act 2013, such as director appointments, shareholder meetings, and other legal obligations. Captigma is here to help. We provide expert support and solutions to make compliance easier for your company. Our team has a deep understanding of Indian business laws, ensuring your company meets all regulatory requirements. Whether you’re a startup or an established business, Captigma simplifies the compliance process from registration to ongoing obligations.
Compliance for Private Limited Company
Compliance means following rules, regulations, or requests. For a private limited company in India, complying with the Companies Act 2013 is crucial. This law includes obligations to the Registrar of Companies (RoC), covering important aspects like the appointment, qualifications, salaries, and retirement of directors, as well as conducting board and shareholder meetings. Every private limited company must comply with RoC regulations, regardless of its size or capital.
Compliance Related to the Registrar - RoC Compliance:
This includes all the legal requirements set by the Registrar of Companies, such as filing annual returns, appointing directors, holding meetings, and maintaining company records.
Compliance Beyond the Registrar's Purview - Non-RoC Compliance:
These are other legal obligations that a company must follow, which are not directly related to the RoC, such as tax filings, labor laws, or environmental regulations.
ROC Compliance for Private Limited Company
As mentioned earlier, these are the obligations a company must fulfill according to the rules set by the Registrar of Companies (RoC) or similar authorities. These usually involve regular filings and following the provisions of the Companies Act.
Ensuring RoC compliance is important for businesses operating in India. RoC compliance for a private limited company can be divided into:
1. Annual Compliance:
These are regular yearly filings and disclosures companies must make, such as submitting annual returns and financial statements.
2. Event-Based Compliance:
These are specific compliances that must be followed whenever certain events happen within the company, like changes in management, share capital, or the company’s registered office.
3. Other Compliances:
This includes additional regulatory obligations that may not fall under annual or event-based compliance but are still important, such as updating director KYC and maintaining statutory registers.
Annual Compliances for Private Limited Company
Annual compliances are a crucial part of corporate governance for companies registered in India. These requirements ensure that a company follows the rules set by the government and operates legally. Below are some key annual compliances for private limited companies:
1. INC-20A: Declaration for Commencement of Business
- For companies registered after November 2019 with share capital, you must obtain a Commencement of Business Certificate within 180 days of incorporation before starting any business activities.
- Failure to get this certificate can result in fines of Rs. 50,000 for the company and Rs. 1,000 per day for each director.
2. Appointment of Auditor & Filing E-form ADT-1
- The first auditor must be appointed within 30 days of incorporation and confirmed at the Annual General Meeting (AGM).
- After the AGM, Form ADT-1 must be filed within 15 days to confirm the auditor’s appointment with the Registrar of Companies (ROC).
3. Board Meetings
- The first Board Meeting must be held within 30 days of incorporation.
- After that, at least four board meetings should be held each year, with a maximum gap of 120 days between two meetings.
- A notice for each board meeting must be given at least 7 days in advance, and minutes of the meeting should be recorded and kept at the company’s registered office.
4. Annual General Meeting (AGM)
- The first AGM should be held within 9 months from the end of the first financial year.
- For subsequent years, the AGM must be held within 6 months of the end of the financial year, with no gap longer than 15 months between two AGMs.
- AGMs are held to approve financial statements, appoint or reappoint auditors, and discuss director remuneration, dividends, etc.
5. Annual ROC Filings
Private limited companies must file their annual accounts and returns with the ROC, providing details about shareholders, directors, and other key information.
These are the forms that need to be filed:
AOC-4: Filing of Financial Statements within 30 days of the AGM.
MGT-7: Annual Returns to be filed within 60 days of the AGM.
DIR-12: Changes in directorship (appointments or resignations), to be filed within 30 days.
DIR-3 KYC: Directors need to submit their KYC details by September 30th each year. A penalty of Rs. 5,000 applies for late filing.
DPT-3: Return of Deposits, to be filed annually by June 30th.
Directors’ Report: A simplified version of the report, covering essential information as per Section 134.
6. Maintenance of Statutory Registers & Books of Accounts
Companies must maintain and update statutory registers and records, including minutes of meetings, books of accounts, financial statements, and other documents required by the ROC.
Event-Based Compliances for Private Limited Company
In addition to annual filings, there are other compliances that must be followed whenever certain events occur within the company. Here are some examples of such events:
- Change in Capital: If the company’s authorized or paid-up capital changes.
- Issuing or Transferring Shares: When new shares are allotted or existing shares are transferred.
- Giving Loans: When the company gives loans to other companies or to its directors.
- Director Appointments: When a new managing or whole-time director is appointed and their payment terms are decided.
- Bank Account Changes: If a bank account is opened, closed, or if the signatories to the account change.
- Change in Statutory Auditors: When the company’s statutory auditors are appointed or changed.
For all these events, specific forms must be filed with the Registrar of Companies (RoC) within a set time frame. If these filings are missed, additional fees or penalties may be imposed. So, it’s important to ensure timely compliance for each event.
Non-Registrar compliance
These regulatory obligations are important for businesses but do not directly involve the Registrar of Companies (RoC). Instead, they are governed by other regulatory bodies and laws based on the nature, size, and industry of the business. Some key obligations include:
1. Payment of Taxes:
Regular payment of taxes such as GST, TDS, TCS, Advance Tax, and Professional Tax (PTax).
2. Filing of Periodic Returns:
- Monthly/Quarterly/Annual GST Returns
- Quarterly TDS Returns
- Income Tax Returns
- Tax Audit Report
- Half-Yearly Employees’ State Insurance Corporation (ESIC) Returns
- Provident Fund (PF) Returns
3. Regulatory Assessments and Reporting:
Compliance with other legal requirements under laws like the Environment Protection Act, Competition Act, and Factory Act.
Non-compliance Penalty
If a company does not follow the rules of the Companies Act in India, both the company and its members can face penalties. These penalties usually involve fines for the period of non-compliance. Also, delays in annual filings may lead to extra fees. Therefore, it’s important for companies to meet their compliance requirements on time to avoid penalties and extra costs.