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Annual Compliances for Private Limited Companies

Mandatory compliances for Private Limited Companies include filing of Declaration of Commencement of Business, statutory registrations, facilitation of AGM & meeting of Board of Directors and so on.

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How To Go For Annual Compliances For Private Limited Companies?

It is compulsory to file a return, comply and get your financial statements audited with the Ministry of Corporate Affairs every financial year. We offer attractive packages for annual compliance.

We collect and verify incorporation document, financial statement, audit & board report and DSC of directors

Step 1

Our experts draft mandatory and supporting documents

Step 2

We complete your filing of AOC-4 and MGT-7

Step 3

Annual Compliances for Pvt Ltd Companies - An overview

All Private Limited companies in India are governed by the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013. According to this act, every company, post incorporation, has to fulfil some, mandatory legal obligations. The compliance requirements are complex with each falling on different due dates and failing to meet them in a timely manner can greatly impact a company.

This may include paying heavy penalties (up to Rs. 1 lakh a year) or the companies and their directors getting blacklisted for a short period of time.

You should maintain a public record which consists of the company’s information which is called as the annual returns of the company, which will be available in the Companies Register. Every year, you are supposed to update the annual return companies regularly.

Benefits Of Filing Mandatory Compliances

  • Improve operational performance
  • Higher employee retention
  • Better information governance
  • Foster best practice
  • Get Annual Compliance

    Filing Annual Compliance - A detailed process

    Following are the mandatory compliances that private limited companies have to fulfil. At Vakilsearch our expert Chartered Accountants, Accounting & Taxation professionals and Company Secretaries will take care of all your compliance requirements. We offer the best-in-class legal consultation for your company. Our team will cover the following compliance requirements as mandated by the Ministry of Corporate Affairs.

    1. Facilitation of Meeting of Board of Directors:

    The first meeting has to be conducted within 30 days of incorporating a business after which four meetings shall be held every quarter in a calendar year. There should not be more than 120 days of gap between two consecutive meetings.

    2. Preparation of Minutes of Proceedings of Meeting:

    Every company needs to file its minutes of the meeting and it shall be preserved permanently to add value in case of any dispute. The Meeting Minutes will be maintained at the Registered Office.

    3. Issuance of share certificates:

    The company is required to issue share certificate to the subscribers of memorandum within 60 days of incorporation.

    4. Filing of Disclosure of Director’s Interest and Declaration of Disqualification:

    In the first Board Meeting, all the Directors are required to give disclosure about their interest in other business entity.

    5. Filing Declaration of Commencement of Business with RoC:

    This has to be done upon registration of the company. Form INC 20A mandatorily needs to be filed within 180 days from incorporation.

    6. Facilitation of Annual General Meeting:

    A company shall conduct at least one AGM each year. The first Annual General Meeting shall be held within nine months from the closing of the first financial year of the company. In other cases, it shall be within six months from the closing of the financial year.

    For Eg: If a Company is incorporated on or before 31st December 2018, the First Annual General Meeting must be conducted within 9 months from the date of closing of 1st Financial Year ( 31.12.2018 - 31.03.2019), that is, by 31st December 2019.

    If a Company is incorporated on or after 1st January 2019, First Annual General Meeting to be conducted within 15 months, i.e., by 31st December 2020.

    7. Annual Return companies have to be e filed with the RoC within 60 days of the conclusion of AGM.

    8. Quarterly compliance:

    Every company has to hold a minimum of four meetings of its board of Directors, that is, at least one board meeting every quarter of the calendar year.

    9. Statutory registrations:

    All statutory registrations like GST, PF, ESI, IEC, etc. must be made.

    Why Vakilsearch

    As an advantage of working with the industry-leading experts, our team will watch all the amendments being made to the law and keep you updated and compliant. Our Accounting and Compliance team will work with you closely to identify all the requirements and complete the process on time.

    What You Need To Know

    Stay Disciplined

    Many businesses let their compliance requirements pile up, even though taking care of them involves much less effort than is often imagined. Staying disciplined from the initial days will be hugely helpful when looking for investment or a bank loan, as both would want to ensure that your business is compliant with the Registrar of Companies' (RoC's) requirements.

    Regular Updates

    Having a company secretary on call throughout the year is essential in ensuring that your business is run in accordance with the laws in force. Our team would keep you up-to-date with all the changes made by the RoC throughout the year. This package is valid for 12 months from the date of payment, not from the start of the financial year.

    FAQs on Annual Compliances for Private Limited Companies

    Do I need to file for compliance even if there are no transactions?

    Yes, every company irrespective of the number of transactions has to get the compliance filings done. However, the process will be much simpler.

    What will happen if the company has exceeded in appointing the prescribed number of Directors?

    A private limited company can have a minimum of 2 directors and a maximum of 15. If there are more than 15 Directors appointed, the company has to file MGT-14 form and provide the SRN.

    What are the documents to be filed with the RoC every year?

    Balance sheet and Annual Returns have to be filed once a year. In addition, companies have to file Form 3 if there is Return of Allotment, Form No INC-22. If there is a change in the Registered Office; Form No DIR-12 for Change of Directors; etc.

    Where and when should the Annual General Meeting be conducted?

    The AGM has to be conducted at the registered office of the company or at any other place within the city, town or village wherever the registered office is situated. The Meeting should happen during the business hours (9 am-6 pm) on any day that is not a national holiday declared by the Central Government

    What happens if the AGM is called-off?

    Annual General Meeting must be conducted within the stipulated timelines. However, if it is not conducted within the stipulated time frame, for the special reason, Registrar of companies may provide an extension for a period not exceeding three months, which can be applied before the last date for holding the AGM. According to section 97 of Companies Act, 2013, if any default is made in holding the AGM of a company U/S 96, the Tribunal may, notwithstanding anything contained in this Act or Articles of Association of company, on the application of any member of company may call or direct the company to call Annual General Meeting of the company. With the help of Section 97, if any company fails to call AGM and didn’t apply for an extension it can call AGM with the help of any member who can file the application to NCLT with Form NCLT-1. In case of any default in complying with provisions of Sections 96 & 97 or failed in complying with any directions of Tribunal, the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs. 1,00,000/- and in case of continuing default, with a further fine which may extend to Rs. 5,000 for every day during which such default continues.

    Can alternate directors be appointed to represent the three directors of a company?

    Yes, the Board of Directors can appoint a person for alternate directors. But he/she must not have been holding a similar post in any other company.

    What are the consequences if a company has failed to file the Financial Statements?

    Pursuant to Section 134 of the Companies Act 2013 and Rules made thereunder, the company shall be punishable with a fine between Rs. 50,000 and Rs. 25,00,000/- and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 3 years or with fine of mimimum Rs. 50,000 and maximum Rs. 5,00,000/- or with both.

    On what grounds can Directors of a company be disqualified?

    As per provisions mentioned in Section 164 of the Companies Act of 2013, a Director of a company can be disqualified if:

    • He does not possess a sound mind and a competent court declares so
    • He is declared insolvent;
    • His application for being declared insolvent is Pending with the appropriate authority
    • He has been convicted of any offence by a competent court. Also if he has been imprisoned for at least 6 months and the sentence has not expired in the last 5 years. However, if he has served at least 7 years after conviction in any offence, he will not be eligible for the directorship of any company.
    • He has been convicted of any offence U/S 188 related to party transactions in the last 5 years
    • A tribunal or a court passes an order to disqualify his appointment as a director and the aforesaid order remains in force
    • He is yet to pay any call with regards to any company share held by him alone or jointly, even after the expiry of 6 months from the fixed date of payment.
    • He has failed to file the annual returns or financial statements of the company to the MCA for 3 financial years in succession.
    • He could not acquire the DIN ( Director Identification Number)
    • He could not repay the deposits accepted or the interest accrued thereon for at least one year
    • He failed to redeem any debentures on time or failed to repay the interest accrued thereon for at least an year
    • He could not repay any dividend declared for at least an year

    Can Board meetings be conducted abroad?

    According to the Companies Act, Board Meetings can be conducted even outside of India. If required, Directors can participate through video conferencing or other audiovisual elements, provided there is a prior notification. The minutes of proceedings shall be duly recorded. However, there are certain matters restricted by the Act to be convened through a Video Conference Meeting.

    Is there any alternative if the Director is unavailable to attend the meeting?

    A Director has to be physically present to attend at least one Board meeting of the company. In absence of the original director, an alternate director may be appointed to attend the meeting. If a director absents himself from all the Board Meetings of the Company, he has to be vacated from the Office of Directorship of the company.

    If there are any changes made after filing the Disclosures of interest of Directors, should the filings be made again?

    Whenever a change occurs in the interest of Directors, the same has to be disclosed at the first Board Meeting held As per section 184, whenever any change occurs in the interest of Directors, disclosure of the same is required to be made at the first Board Meeting held after such change

    Can a person be Managing Director in two companies?

    The Companies Act 2013, allows one person to be the managing director in up to 2 companies at the same time.

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