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Private Limited Compliance
Private Limited Company Annual Compliance
Private Limited Company Annual Compliance is a set of mandatory legal and financial obligations that every registered private limited company in India must fulfill each year. ⚖️ This primarily involves conducting board meetings, holding an Annual General Meeting (AGM), getting accounts audited, and filing key documents like the Annual Financial Statements (Form AOC-4) and the Annual Return (Form MGT-7) with the Ministry of Corporate Affairs (MCA).
Service Overview
Private Limited Company Annual Compliance is a set of mandatory legal and financial obligations that every registered private limited company in India must fulfill each year. ⚖️ This primarily involves conducting board meetings, holding an Annual General Meeting (AGM), getting accounts audited, and filing key documents like the Annual Financial Statements (Form AOC-4) and the Annual Return (Form MGT-7) with the Ministry of Corporate Affairs (MCA).
Advantages & Disadvantages
Advantages
Maintains Legal Standing
Ensures the company remains compliant and active on the MCA register, safeguarding its legal status.
Enhances Credibility
A strong compliance history builds trust with banks, investors, and other stakeholders, making it easier to secure funding.
Avoids Heavy Penalties
Timely filing prevents the imposition of heavy daily penalties and saves the directors from potential disqualification.
Good Corporate Governance
Regular compliance promotes transparency and accountability in the company's management and operations.
Disadvantages
Hefty Daily Penalties
The penalty for late filing of MCA forms is ₹100 per day for each overdue form, with no maximum limit.
Director Disqualification
Failure to file annual returns for three consecutive years can lead to the disqualification of all company directors.
Risk of Strike-Off
The Registrar of Companies (RoC) can strike the company's name from the register for continuous non-compliance.
Eligibility Criteria
Applicability
- Annual compliance is mandatory for all registered Private Limited Companies.
- This applies regardless of the company's turnover or whether it has conducted any business during the financial year.
Documents Required
Financials, Audit & Meeting Records
- Complete Financial Statements (Balance Sheet, Profit & Loss Account).
- Statutory Audit Report prepared by a Chartered Accountant.
- Director's Report and Board Meeting Minutes.
- Annual General Meeting (AGM) Minutes.
- Digital Signature Certificates (DSCs) of the directors.
Step-by-Step Registration Process
1
Conduct Board Meetings
Hold a minimum of four board meetings in a calendar year, with a gap of not more than 120 days between two consecutive meetings.
2
Statutory Audit of Accounts
Appoint a statutory auditor and get the company's financial statements audited for the financial year.
3
Hold Annual General Meeting (AGM)
Conduct an AGM within six months from the end of the financial year (i.e., by 30th September).
4
File Financial Statements (Form AOC-4)
File the audited financial statements and Director's Report with the MCA within 30 days of the AGM.
5
File Annual Return (Form MGT-7)
File the company's annual return, containing details of directors, shareholders, etc., with the MCA within 60 days of the AGM.
6
File Income Tax Return (Form ITR-6)
File the company's annual Income Tax Return. The due date is typically 31st October, as an audit is mandatory.
Registration Fees
| Component | Approximate Fees (INR) | Remarks |
|---|---|---|
| Government Fees (AOC-4 & MGT-7) | ₹300 - ₹600 per form | Varies based on the company's authorized capital. This is for on-time filing. |
| Penalty for Late Filing | ₹100 per day, per form | This penalty has no maximum limit. |
| Professional & Audit Fees | ₹15,000 - ₹30,000+ per year | Includes accounting, mandatory audit, and filing of all annual returns with MCA and the Income Tax department. |
Frequently Asked Questions
Is a statutory audit mandatory for a private limited company?▼
Yes, a statutory audit conducted by a practicing Chartered Accountant is mandatory for every private limited company, irrespective of its turnover or profitability.
What is an Annual General Meeting (AGM)?▼
An AGM is a mandatory annual meeting of the company's shareholders. In this meeting, the audited financial statements are approved, directors are appointed, and dividends are declared.
What happens if we don't file the annual returns on time?▼
Late filing attracts a steep penalty of ₹100 per day for each overdue form. Continuous failure for three years can lead to the disqualification of directors and the company's name being struck off from the register.