Did you know that it is mandatory for every Pvt Ltd Company to hold an AGM in every calendar year? Bet you’re now wondering what other compliance requirements need to be in place!
A private limited company is India’s most popular form of business entity. The Companies Act governs private limited companies in India under the Ministry of Corporate Affairs (MCA). According to the MCA, every Private Limited Company is bound to discharge mandatory secretarial compliance filings or RoC compliance within the due dates fixed to avoid facing penalties.
Functions of the Registrar of Companies
There are 22 Registrars of Companies spread across India. The RoC or Registrar of Companies is an office under MCA that deals with the administration of the Companies Act 2013. Further, the RoC has been appointed under Section 609 of the Companies Act. It is the duty of the RoC to ensure that private limited companies and Limited Liability Partnership India comply with the statutory requirements of the Act. The RoC also maintains a registry that records all companies registered with them.
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What are the Mandatory RoC Compliance Filings for a Private Limited Company?
Here is a quick checklist of all the compliance formalities that need to be discharged:
For a public limited company, there should be at least four board meetings conducted in a calendar year, and in the case of a private company, at least two board meetings should be conducted. 1/3rd of the total number of directors or a minimum of 2 directors, whichever is greater, should be present at the meeting, and they should be intimated at least 7 days prior regarding the agenda of the meeting. The board meeting minutes are to be kept at the company’s registered office.
Annual General Meeting (AGM)
One AGM should be held every year, and a gap of 15 months should exist between the two AGMs. Likewise, the purpose of an AGM is to discuss the company’s financial statements, the appointment of an auditor, the declaration of dividends, remuneration, etc.
Appointment of the Auditor (Form ADT-1)
Companies must appoint their first auditor within 30 days of the date of Incorporation of the Company. The first auditor is to be appointed for five years, and the appointment must be filed before RoC using Form ADT-1. When a company appoints a new auditor within 15 days of the annual general meeting, form ADT-1 must be filed with the RoC.
Appointment of Directors in Private Companies are required to file form MBP-1 to disclose their interests in any other company. Such disclosure is to be made every year at the first board meeting. Moreover, every company director in each financial year has to file the company disclosure of non-disqualification in Form DIR-8.
Further, in case of the appointment of a new director, the qualifications of the new director are to be taken as a declaration.
Accounts to be Audited by a Statutory Auditor
Every company should have a Statutory Auditor to prepare/verify the annual report and financial statements and to have the financial report audited.
Filing of Form MGT 7
Every company has MGT within 60 days from the date of conducting the Annual General Meeting. It should contain the following information:
- Details of the board and member meeting
- Registered office and principal place of business of other holdings and associate companies
- Debenture holders/members, including the changes made
- Key managerial personnel, directors and promoters with mention of the changes made
- Remuneration of directors and key managerial personnel
- Details of the legal matters that the company is involved in
- Details of any penalty or fine imposed on the company
- Shareholding pattern
- Debentures, shares, and other securities
- Liability or indebtedness
- Certification of compliance matters.
These details will be open for public inspection in case of any dispute or any matter arising thereof. In case of default in filing the annual return, a fine of ₹100 will be imposed per day of default.
Filing of Financial Statement (Form AOC-4 )
This filing is also a mode of communication between the shareholders and the company’s board of directors. Further, the form informs the shareholders about their investments and discloses all the financial transactions in the financial year. Further, this formality should be discharged within 30 days from the date of the annual general meeting. It should include the following:
- Balance sheet
- Details of the particulars on the balance sheet
- Details of corporate social responsibility
- All the related party transactions that the company have entered into
- Details of the profit and loss account
- The audit report and any other miscellaneous transactions (both directors and secretarial audit)
- Particulars about the auditor and board meeting should also be filed.
Statutory Audit of Accounts
Companies must prepare their accounts and get them audited by a chartered accountant at the end of the financial year. Moreover, those audit reports and financial statements should be filed with the registrar.
Maintenance of Statutory Registers
Maintaining statutory registers, minutes of board meetings, AGM, creditors meetings, and debenture holder meetings are mandatory.
Other Non-RoC Compliances
In addition to the above-mentioned mandatory compliance filings, some of the non-RoC compliance for private limited companies are:
- TDS payment
- GST payment and GST Return filing
- Other payments of periodic dues
- Filing of quarterly TDS returns
- Advance tax payment
- Filing of IT returns
- Filing of tax audit reports
- Tax audits.
Why Should a Private Limited Company File RoC Compliance?
For any default in RoC compliance: https://www.mca.gov.in/MinistryV2/compliancerelatedfiling.html, the company and the officers responsible for such non-compliance shall be penalized for the period of default. The fine imposed will be computed daily and for the period for which the default continues. Further, an additional fee has to be paid in case of a delay in filing. Hence every company should comply with RoC requirements.
Managing your business’s day-to-day activities while also adhering to corporate compliance laws can be extremely stressful. Hence, this is why it is best to partner with Vakilsearch to ensure timely compliance and no imposition of interest or penalty in the most hassle-free manner.