SERVICESCompliance for Private Limited Companies
Overview of Compliance for Private Limited Companies
The term compliance describes the ability to comply with orders, set of rules, or requests. A private limited company that has been incorporated in India must ensure the compliances concerning the Companies Act, 2013 are adequately met. It requires controlling its active status through the regular filing with the Ministry of Corporate Affairs (MCA). The compliances relevant to the company could be segregated into two sections:
- Mandatory Compliances and
- Event-Based Compliances
The perpetual failure of compliance may lead to the elimination of the company's name from the register of companies, including the incompetence of directors. Also, it has been noticed that MCA has actively taken bold measures to deal with any such failures.
Mandatory Compliances
| Compliance | To be done in |
|---|---|
| First Board Meeting | The First Meeting of the Board, along with Directors, is expected to be held within 30 days of the Incorporation of the Company. Declaration of Board Meeting must be sent to each director at least seven days prior to the meeting |
| Board Meetings | Minimum of 4 Board Meetings to be checked every year with a gap of not more than 120 days between two meetings |
| Filing of Acknowledgement of Interest by Directors |
Every director at:1.The first meeting in which he engages as director; or
2. The first meeting of the Board in each Financial Year; or
3.Whenever there is a variety in disclosures shall reveal in Form MBP 1 (along with a list of relatives and attention of relatives in the company as per RPT definition), his interest or interest in any company, body corporate, organizers/firms or other organization of individuals (including shareholding interest). Form MBP‐1 shall be kept in the documents of the company. |
| First Auditor | The Board of Directors shall designate the first Auditor of the Company within 30 days of Incorporation, who shall continue the office till the completion of the 1st Annual General Meeting. In the matter of First Auditor, filing of ADT-1 is not necessary. |
| Subsequent Auditor | The Board of Directors shall delegate the Auditor in the first Annual General Meeting of the Company, who shall hold the position until the 6th Annual General Meeting and notify the same ROC by filing ADT-1. The capacity to submit Form ADT 1 is of the company and not the Auditor in between the 15 days from the time of appointment. |
| Annual General Meeting | Every company is needed to hold an Annual General Meeting on or before 30th September every year during working hours (9 am to 6 pm). On a day that is not a general public holiday and either at the certified office of the company within the city, town/ village where the certified office is positioned. A 21-day notice is required to be given for the same. |
| Filing Of Annual Returns (Form MGT-7) | Each and every Private Limited Company is expected to file its Annual Return within 60 days of conducting of Annual General Meeting. Annual Return will be for the time 1st April to 31st March. |
| Filing Of Financial Statements In (Form AOC-4) | Every private Limited Company is expected to file its 'Balance Sheet' along with a statement of 'Profit and Loss Account' and 'Director Report' in this Form within 30 days of holding off 'Annual General Meeting'. |
| Statutory Audit of Accounts | Each and every company should prepare its Accounts and get the same audited by a Chartered Accountant or any appropriate person at the end of the Financial Year mandatorily. The Auditor should provide an Audit Report and the Audited Financial Statements to file with the Registrar. |
2.Event-Based Compliances
Even based compliances are that which need to be complied with upon happening of certain events like change in directors, change of registered office, change in approved share capital etc. Some of the Event-based agreements are mentioned below, along with the time limit:
| Actions | Form No. | Phase Limit |
|---|---|---|
| Change in registered office | INC-22 | Within fifteen days from the date of such change |
| Change in Directors or KMP | DIR-12 | Within 30 Days of such change |
| Increase in Authorized Share capital | SH-7 | Within 30 days of passing Ordinary Resolution |
| Filing of resolution and agreements | MGT-14 | Within 30 days from date of passing resolution |
| Increase in Paid up share capital (Issue of security) | PAS-3 | Within fifteen days from the date of the allotment |
| Change in secured borrowing (Creation, modification and satisfaction of charge) | CHG-1 | All types of Charges within 30 days of its creation |
| Application for KYC of Directors | DIR-3 KYC | On or before 30th April of immediate next Financial Year (Annual Compliance) |
| Declaration of Commencement of Business | INC-20A | Within a period of 180 days of the date of incorporation of the company. (Applicable to companies incorporated after 2nd November, 2018.) |
| Change in Directors or KMP | DIR-12 | Within 30 Days of such change |
| Increase in Authorized Share capital | SH-7 | Within 30 days of passing OR |
| Increase in Paid up share capital (Issue of security) | PAS-3 | Within fifteen days from the date of the allotment |
| Change in registered office | INC-22 | Within fifteen days from the date of such change |
| Change in secured borrowing (Creation, modification and satisfaction of charge) | CHG-1 | All types of Charges within 30 days of its creation |
| Change of name of company | 24 | Within 60 days from the date of applying reservation of name in INC-1 |
| Conversion of company | INC-27 | – |
| Filing of resolution and agreements | MGT-14 | Within 30 days from date of passing resolution |
| Removal of Auditor before Expiry | ADT-2 | Within 30 days from date of passing SR |
| Application for KYC of Directors | DIR-3 KYC | On or before 30th April of immediate next Financial Year (Annual Compliance) |
| Report for Disqualification of the Director | DIR-9 | To be filed by company within 30 days of such disqualification |