Mandatory Annual Compliance Checklist For A Private Limited Company

Private Limited Companies are one of the most popular types of business entities in India due to their structured nature, manner, limited liability and ease of raising funds. However, running a private limited company comes with a set of legal responsibilities, and annual compliance is one of the most critical ones.

Non-compliance with the regulatory requirements can lead to heavy penalties, disqualification of directors, and even legal action. This blog outlines the mandatory annual compliance for a private limited company in India, as per the regulations of Companies Act, 2013, and other applicable laws.

Why is Annual Compliance Important?

Annual compliance ensures that the company is operating legally and in transparently manner. Here are some key reasons why annual compliance is important:-

• Avoids legal penalties and other legal consequences.
• Builds credibility and trust with stakeholders.
• Helps in securing loans and attracting investors.
• Ensures smooth operation and corporate governance.

Mandatory Annual Compliance Checklist

Below is the extensive checklist of annual compliances required to be followed by a Private Limited Company:-

1. Board Meetings

• Minimum Requirement: At least four Board Meetings should be held in a calendar year, and the gap between two consecutive meetings should not exceed 120 days.
• Documentation: Proper notice of the meeting must be sent to all directors, and minutes of the meeting should be recorded and maintained.

2. Annual General Meeting (AGM)

• Applicability: Every Private Limited Company (except a One Person Company) is required to hold an AGM.
• Timeline: The first AGM must be held within 9 months from the end of the first financial year. Thereafter, an AGM must be held each year within 6 months from the end of the financial year, but not exceeding 15 months from the previous AGM.
• Agenda: Approval of financial statements, declaration of dividends, appointment/re-appointment of auditors, etc.

3. Filing of Financial Statements – Form AOC-4

• Due Date: Within the 30 days of the AGM.
• Details to be Filed: Audited Balance Sheet, Profit and the Loss Account, Cash Flow Statement (if applicable), Director’s Report, Auditor’s Report.
• Penalty for non-filing: ₹100 per day of default with no upper limit.

4. Filing of Annual Return – Form MGT-7

• Due Date: Within the time period of 60 days from the date of AGM.
• Details Required: Shareholding structure, changes in directorship, details of transfers, and other company matters.
• Applicability: Mandatory for companies having paid-up share capital of the ₹10 crore or more or turnover of ₹50 Crore or more.

5. Filing of Director’s Report

The Director’s Report must be attached with Form AOC-4 and includes:

• Financial summary/highlights.
• Dividend declaration (if any).
• Details of meetings.
• Extract of Annual Return (MGT-9).
• Comments on financial statements by the Board.
• Details of related party transactions.

The report must be signed by the chairperson of the company or two directors.

6. DIR-3 KYC – Director’s KYC

• Applicability: Every director who has been allotted a Director Identification Number (DIN) as on 31st March.
• Form to be Filed:DIR-3 KYC or DIR-3 KYC WEB (if no changes in personal details).
• Due Date: On or before 30th September every year.
• Penalty: ₹5,000 for non-filing.

7. Auditor Appointment – Form ADT-1

• When Required: Upon appointment or reappointment of an auditor at the AGM.
• Due Date: Within the duration of15 days of the AGM.
• Validity: Auditor is usually appointed for a term of 5 years.
• Form to be Filed:ADT-1.

8. Maintenance of Statutory Registers and Records

The company must maintain updated and the accurate statutory registers at its registered office. These may include:

• Register of Members.
• Register of Directors and Key Managerial Personnel.
• Register of Charges.
• Register of Contracts.
• Register of Share Transfers…!

These registers must be produced for inspection during audits or by regulatory authorities if requested.

9. Income Tax Return Filing

• Applicability: All Private Limited Companies must file income tax returns irrespective of their income, profit or loss.
• Form to be Filed:ITR-6.
• Due Date: Usually 31st October of the assessment year.
• Penalty: Up to ₹10,000 for late filing.

10. Tax Audit (if applicable)

If the company’s turnover exceeds ₹1 Crore (or ₹10 Crore in case of non-cash transactions), then a tax audit is mandatory under Section 44AB of the Income Tax Act.

• Due Date: 30th September.
• Form to be Filed: Form 3CA/3CB and 3CD.

11.TDS Returns

If the company has deducted TDS on salaries, contracts, rent, and professional fees, etc., it is required to file quarterly TDS returns in Form 24Q/26Q.

• Due Dates:

• Q1 (Apr-Jun): 31st July
• Q2 (Jul-Sep): 31st October.
• Q3 (Oct-Dec): 31st January.
• Q4 (Jan-Mar): 31st May.

12.GST Returns (if applicable)

If the company is registered under GST, it must file monthly/quarterly and annual GST returns.

• Forms: GSTR-1, GSTR-3B, GSTR-9 (Annual Return).
• Due Dates: Vary based on turnover and scheme opted (monthly/QRMP).

13. Other Event-Based Compliances

Apart from the above annual compliances, some forms are to be filed based on specific events such as:

• Change in directors or KMP – DIR-12
• Change in registered office – INC-22
• Allotment of shares – PAS-3
• Creation/modification/satisfaction of charge – CHG-1/CHG-4

These filings must be made within the timelines prescribed by the Companies Act.

Consequences of Non-Compliance

Non-compliance with annual filing requirements may result into:

• Heavy penalties and fines.
• Disqualification of directors under Section 164.
• Deactivation of DIN.
• Inability to secure funding or participate in tenders.
• Legal prosecution and strike-off of the company.

Professional Help and Compliance Tools

Given the complexity and the frequency of filings, many companies opt to engage Chartered Accountants, Company Secretaries, or compliance service providers to manage their obligations.

Several compliance tools and cloud-based software also assist in tracking due dates, generating forms, and ensuring timely filings.

Conclusion

Annual compliance for a Private Limited Company in India is a legal obligation that cannot be overlooked. It ensures transparency, financial discipline, and good governance. By adhering to the required compliance checklist, companies can avoid penalties and enhance level of their credibility among stakeholders, investors, and regulatory authorities.

If you’re running a private limited company or planning to incorporate one, staying updated with these annual compliance requirements will help you stay on the right side of the law and maintain smooth business operations.