PVT LTD Company Compliance
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Pvt Ltd Compliance
Pvt Ltd Compliance refers to the specific regulatory and legal obligations that Private Limited Companies (Pvt Ltd) in India must adhere to under various laws, primarily the Companies Act, 2013, along with other applicable regulations. These compliance requirements ensure that the company operates within the legal framework, maintains transparency, and fulfills its obligations to regulatory bodies, shareholders, and other stakeholders.
1. Incorporation and Registration
- Company Registration: The company must be registered with the Registrar of Companies (ROC) and obtain a Certificate of Incorporation.
- Director Identification Number (DIN): Every director must obtain a DIN before being appointed to the board.
2. Annual Compliances
- Annual General Meeting (AGM): The company must hold an AGM every year. The first AGM must be held within 18 months from the date of incorporation and subsequent AGMs within 15 months of the last AGM.
- Filing of Financial Statements (Form AOC-4): Annual financial statements, including balance sheets and profit and loss accounts, must be filed with the ROC within 30 days of the AGM.
- Annual Return (Form MGT-7): The annual return must be filed within 60 days from the date of the AGM, detailing the company’s shareholders, directors, and other key information.
3. Board Meetings and Resolutions
- Board Meetings: The company must hold at least four board meetings in a financial year, with a maximum gap of 120 days between two meetings.
- Minutes of Meetings: Minutes of all board meetings and AGMs must be recorded and maintained.
4. Director’s Compliance
- Director Identification Number (DIN): Directors must have a valid DIN and update their KYC details annually through DIR-3 KYC.
- Declaration of Interest: Directors must declare any interest in contracts or arrangements entered into by the company.
5. Statutory Audits
- Appointment of Auditors: An auditor must be appointed for a term of five years, and the appointment or reappointment must be filed with the ROC using Form ADT-1.
- Audit of Financial Statements: The company’s financial statements must be audited annually by a qualified Chartered Accountant.
6. Tax Compliance
- Income Tax Filing: The company must file its income tax return annually by September 30 of the assessment year, along with paying advance taxes quarterly.
- TDS (Tax Deducted at Source): The company must deduct TDS on applicable payments and file TDS returns quarterly.
- Goods and Services Tax (GST): If applicable, the company must register for GST, file monthly/quarterly GST returns (GSTR-1, GSTR-3B), and pay GST dues.
7. Compliance with Other Regulations
- Employees Provident Fund (EPF) and Employees State Insurance (ESI): The company must comply with EPF and ESI regulations if it employs more than 20 employees.
- Company Secretarial Compliance: Ensure adherence to corporate governance practices and legal requirements.
8. Changes in Company Structure
- Change in Registered Office: Any change in the company’s registered office must be intimated to the ROC through Form INC-22.
- Change in Directors or Key Managerial Personnel: Changes in the board or KMP must be reported using Form DIR-12.
9. Compliance with Share Capital Requirements
- Allotment of Shares: Any issuance or allotment of shares must be reported to the ROC using Form PAS-3.
- Increase in Authorized Share Capital: Any increase in the authorized share capital must be filed with the ROC using Form SH-7.
10. Other Statutory Compliance
- Corporate Social Responsibility (CSR) Companies meeting certain criteria must spend at least 2% of their average net profit on CSR activities and report these in the board report.
11. Registrar of Companies (ROC) Compliance
- File e-forms: The company must file various e-forms with the ROC for compliance with the Companies Act, including annual returns, changes in directors, and other statutory documents.
- Fines and Penalties: Non-compliance with various provisions of the Companies Act can lead to fines, penalties, and interest charges.
- Legal Action: Persistent non-compliance can result in legal action against the company and its directors.
- Striking Off the Company: Failure to comply with mandatory filings and statutory requirements may lead to the company’s name being struck off the register by the ROC.
- Legal and Ethical Operations: Ensures that the company operates within the legal framework and adheres to ethical business practices.
- Reputation Management: Maintains the company's reputation and trust among stakeholders, including investors, employees, and customers.
- Smooth Operations: Timely compliance avoids disruptions in business operations and ensures smooth functioning.
- Avoid Penalties: Adhering to compliance requirements helps avoid financial penalties and legal issues.
- Incorporation Documents: Certificate of Incorporation, MOA, AOA, DIN Certificates, PAN Card, Proof of Registered Office Address.
- Board & AGM Records: Minutes of Board Meetings and AGMs, Resolutions.
- Financial Documents: Financial Statements, Audit Reports, Bank Statements, Invoices.
- Compliance Filings: Annual Return (Form MGT-7), Financial Statements (Form AOC-4), Director KYC Forms (DIR-3 KYC), Income Tax Returns, GST Returns.
- Tax & TDS Documents: TDS Returns and Certificates, GST Compliance Documents
1. What is a Private Limited Company?
A Private Limited Company (Pvt Ltd) is a type of company structure where the liability of shareholders is limited to their shares, and the company's shares cannot be publicly traded. It is a separate legal entity from its owners, which provides limited liability protection and continuity of existence.
2. What are the key compliance requirements for a Private Limited Company?
- Annual General Meetings (AGMs)
- Filing of Financial Statements (AOC-4)
- Filing of Annual Return (MGT-7)
- Conducting Board Meetings
- Director's KYC (DIR-3 KYC)
- Statutory Audit of Financial Statements
- Income Tax Returns (ITR)
- TDS Returns
- GST Returns (if applicable)
- EPF and ESI Compliance (if applicable)
3. When should a Private Limited Company hold its Annual General Meeting (AGM)?
The company must hold its first AGM within 18 months from the date of incorporation. Subsequent AGMs should be held within 15 months of the last AGM.
4. What is the deadline for filing financial statements with the Registrar of Companies (ROC)?
Financial statements must be filed with the ROC within 30 days of the date of the AGM.
5. What is an Annual Return, and when should it be filed?
An Annual Return (Form MGT-7) is a comprehensive report on the company’s shareholders, directors, and other key information. It must be filed within 60 days from the date of the AGM.
6. How often must a Board Meeting be held?
A Private Limited Company must hold at least four board meetings in a financial year, with a maximum gap of 120 days between two meetings.
7. What is Director Identification Number (DIN), and why is it important?
DIN is a unique identification number assigned to directors of a company. It must be obtained before a person is appointed as a director. It is essential for tracking and verifying the identity and activities of directors.
8. What is required for a company to be in compliance with statutory audits?
A company must appoint a qualified Chartered Accountant as its statutory auditor and have its financial statements audited annually. The appointment or reappointment of auditors must be filed with the ROC using Form ADT-1.
9. What are the due dates for filing Income Tax Returns?
Income Tax Returns must be filed by September 30 of the assessment year (for companies).
10. When should TDS returns be filed?
TDS returns are filed quarterly, with deadlines typically falling in July, October, January, and May.
11. How does a company comply with GST requirements?
If applicable, the company must register for GST, file monthly or quarterly GST returns (GSTR-1, GSTR-3B), and pay GST dues. The due dates for GST returns are usually the 11th or 20th of the subsequent month.
12. What are the compliance requirements for Employee Provident Fund (EPF) and Employees State Insurance (ESI)?
For companies employing more than 20 employees, compliance with EPF and ESI involves timely payment of contributions and filing of returns.
13. What steps should be taken if there is a change in the company's registered office?
The company must file Form INC-22 with the ROC to notify any change in the registered office address.
14. What is the process for increasing the authorized share capital?
To increase authorized share capital, the company must file Form SH-7 with the ROC detailing the change.
15. What happens if a company fails to comply with regulatory requirements?
Failure to comply can result in penalties, fines, legal action, and, in severe cases, striking off the company from the register. Directors may also face disqualification or other legal consequences.
16. How often should the Director's KYC be updated?
Directors must file DIR-3 KYC annually to update their details.
17. What are the CSR compliance requirements for a Private Limited Company?
Companies meeting specific criteria must spend at least 2% of their average net profit on CSR activities and report these activities in the board report.
18. Can a company be struck off the register?
Yes, if a company consistently fails to comply with mandatory filings and statutory requirements, the ROC may strike off its name from the register.
19. What is the role of a Company Secretary in compliance?
A Company Secretary (CS) assists in ensuring that the company complies with legal and regulatory requirements, including maintaining records, filing returns, and advising on corporate governance.
20. How can a company ensure timely compliance?
Maintaining an organized calendar for due dates, keeping up with regulatory changes, using compliance management software, and consulting with professionals such as company secretaries or legal advisors can help ensure timely compliance.