Annual compliance is important for private limited companies these companies have to ensure that they follow the set laws as well as follow the right standard which is of governance. Since financial obligations are met annually, firms overcome penalties and legal issues, including filing financial statements and modifying records in relevant authorities. This regular upkeep also simulates confidence with the concerned stake holders such as investors, creditors and customers. At long last, compliance merely sustains the much-needed confidence, increases business performance, and paves way for sustainable business development.

 

Below is a comprehensive list of what practical compliance entails.

 

Annual General Meeting (AGM)

 

• Timeline: Should be conducted not later than six months from the end of the financial year usually not exceeding September 30th.

• Agenda: Emendation of financial statements, declaration of dividends, appointment/reappointment of directors & appointment/reappointment of auditors.

 

Filing of Financial Statements (Form AOC-4)

 

• Purpose: This shall be in the form of the balance sheet statement of income and expenditure statement of cash flow and notes there on.

• Deadline: A period up to 30 days from the AGM day has been considered.

• Attachments:

• Balance Sheet

• Profit & Loss Account

• Cash Flow Statement

• Director’s Report

• Auditor’s Report

• Notice of AGM

 

Annual Return (Form MGT-7)

 

• Purpose: Appointment of the company’s return of directors and secretaries, Shareholders and any other member of key management personnel.

• Deadline: Any Section 304 statement must be provided within 60 days of holding the AGM.

• Key Information:

• Registered office address

• Principal business activities

• More details of shares, debentures, and other security

• And the following disclosures of directors and other senior management executives

 

Income Tax Return Filing

 

• Form: ITR-6 for companies

• Deadline: September 30th (unless extended)

• Attachments:

• Audited financial statements

• Tax audit report (if applicable)

• To implement the above programs and activities as per the provisions of Income Tax Act the following detailed schedules would be required.

 

Statutory Audit

 

• Requirement: Which are required for every private limited company without any need of turnover in the specific company.

• Process: This audit is carried out by a statutory auditor and entails examination of the compliance with regards to accounting standard and the Companies Act, 2013.

 

Director’s Report

 

• Contents: Contains company information on conduct of business, financial results, dividends, reserve, alteration in directors and other drastic actions and events throughout the fiscal year.

• Attachments: Must be accompanied by the financial statements and submitted to the MCA.

 

Maintenance of Statutory Registers

 

• Registers:

• Register of Members (MGT-1)

• OCC Form 26 Director and Manager Appointment and Change (DIR-12)

• Register of Charges (CHG-7)

• Register of Share Transfer (SH-10)

• Purpose: The Company details as encapsulated on the right part of figure 2 below comes from the Companies Act 2013 section 12.

 

Minutes of Meetings

 

• Requirement: It is necessary to make and retain minutes for the calendar of all the board meeting  and general meeting 

• Timeline: Depending on the nature of a meeting general or special, the minutes to be signed must be prepared within one month of holding the meeting.

 

Director KYC

 

• Form: DIR-3 KYC

• Deadline: Where any director has obtained DIN before March 31 of the financial year and in case of each of the companies before September 30 of the next financial year.

• Purpose: In order to provide optimal details of Directors at least for updated KYC every financial year.

 

Form DPT-3

 

• Purpose: Where a person has made a return of deposits or of any particulars of transactions which, in fact, are not deposits, then it should not be such a deposit.

• Deadline: June 30th every year.

• Applicability: This applies to all companies irrespective of whether they have not accepted any deposits or not, as may be the case.

 

Form ADT-1

 

• Purpose: As will be recalled, one of the grounds is invalid appointment as an auditor or discharge from office; therefore to give notice to the ROC

• Timeline: Within 15 days of the AGM.

• Frequency: For example, as have been recommended, every five years or any time a new auditor is appointed has become the recommended practice.

 

Compliance with MSME Act (if applicable)

 

• Form: MSME Form-1

• Purpose: Hence the use of filings half yearly returns in conjunction with payments made to Micro or Small enterprise.

• Deadlines:

• Information for October 31 is in both filings for the fiscal year and quarterly filings for the period of April-September.
  

• for the duration of October to March next year, on the 31 of April.

 

Compliance under GST (if applicable)

 

• Monthly/Quarterly Returns: Depending on the company’s turnover.

• Annual Return (Form GSTR-9): Filing of nil GST returns through joint filing for the entire year.

• Reconciliation Statement (GSTR-9C): Compulsory for the business entity as per the business turnover standards more than Rs 2 crores. 

 

Form MSME-1

 

• Objective: Even, dealers have to furnish half yearly return of the value of the supplies made to Micro and Small enterprises.

• Deadlines:

• April 30th for October to March

• October 31st for April to September

 

Other Statutory Compliances

 

• TDS Returns: It is an information return to be lodged quarterly of such employer as has paid excess amount on account of tax at source to more than ten employees.

• Advance Tax: That is the requirement to file only one income-tax return in each year and to pay wedges of taxes in four equal installments within the year ending on that date only. 

• Employee Provident Fund (EPF) and Employee State Insurance (ESI) Compliance: That is the monthly payments and returns if such fantasies are within the monthly means.

• Professional Tax Compliance: For applicable states.

 

Secretarial Audit (if applicable)

 

• Applicability: Required from financial years ending on or after March 31, 2014, for companies having a paid up capital in excess of 50 crore or more or turnover in excess of 250 crore or more.

• Form: MR-3 (Secretarial Audit Report).

 

Event-Based Filings

 

• Amendment of authorized/ paid up share amount: Forming of Form SH-7

• Change in the Registered office : by Filing INC 22.

• Appointment/Resignation of Directors: Filing of Form DIR-12

• Allotment of Shares: Filing of Form PAS-3

 

Filing of Board Resolutions (MGT-14)

 

• Purpose: Declaration of the resolutions of the Board of Directors prepared by the board of directors of the company.

• Applicability: Integral for selected resolutions based on the Companies Act of 2013.

 

LLP Compliance (if applicable)

 

• For LLPs as subsidiaries or partners:

• Form 8 (Statement of Accounts & Solvency)

• Form 11 (Annual Return of LLP)

 

Audit Compliance

 

• Internal Audit (if applicable): Applicable where the turnover of the company which plans to invest in Poland exceeds a specific level.

• Cost Audit (if applicable): Compulsory to industries that directly engage in manufacturing processes.

 

Important Deadlines

 

• April 30th: MSME Form-1 for October-March period

• June 30th: DPT-3

• July 31st: TDS Return for Q1

• September 30th: ITR filing, Conducting AGM, DIR-3KYC

• October 30th: Form AOC-4

• October 31st: TDS Turnover Class for MSME Form-1, Q2 of the Financial Year: April-September

• November 30th: Submission of tax audit report (if applicable), Form MGT-7

• January 31st: TDS Return for Q3

 

Penalties for Non-Compliance

 

• Late Fees: Penalties for late filings can range from 100₹ per day to more severe penalties for non-compliance with financial filings.

• Independent Directors: Failure to file financial statements or annual reports for three consecutive years may result in the termination of directors.

• Penalties and Legal Action: The Company and its employees may be subject to penalties and potential legal proceedings for continued non-compliance.

Ensuring timely and accurate compliance is essential to a private company’s ability to operate effectively, avoid penalties and maintain a good standing with regulators

 

It's the annual cost compliance of private company which highly variable with respect to business operations, servicing requirements and costs pertaining to the staffing from the compliance service providers. These are some possible changes :

 

Basic Compliance Costs

 

• Statutory Audit Fees: Depending on the audit fee and the level of audit complexity it would be between 10000₹ to 50000₹.

• ITR Return Income tax filing : (5,000₹ - 15,000₹ )
  

• Fee for Submission to MCA (Forms AOC-4, MGT-7): 500₹ - 1500₹ per form

• Director KYC (DIR-3 KYC): Rs 0 ₹ to Rs 500 ₹ – Rs 5,000 per director appointed after the due dates. (in case appointed after due date)

• Annual submission to ROC (Registrar of Companies): 5000₹ - 15000₹

• Form ADT-1 Filing: 300₹ - 500₹

 

Professional Fees

 

• Company Secretarial Services: ₹ 10000 - ₹ 30000, depending on drafting of resolutions, preparing minutes etc.
  
• Tax Consultant Fee: 5,000₹ - 20,000₹ (for processing and compliance of tax returns)
• Legal consultation charges: 5,000₹ - 20,000₹ for compliance services
• GST filing services: 2,000₹ - 10,000₹ in a year (if so required)
  

 

Additional Compliance Costs

 

• GST Annual Return Filing (GSTR-9): 5000₹ - 10000₹

• Cost Audit (if applicable): 20,000₹ - 50,000₹

• Internal Audit (if applicable): 15,000₹ - 40,000₹

• Secretarial Audit (if applicable): 20,000₹ - 50,000₹

• Form DPT-3 Filing: 500₹ - 1,500₹

 

Penalties for Late Filing

 

• MCA late fees filing: 100₹ per day on every form.
  

• Deferred DIR-3 KYC: ₹5,000 per director

• Income tax return late filers: 5000₹ - 10000₹
  

 

Total Estimated Costs

 

• For small and medium companies: 30000₹ - 100000₹ per annum

• For Larger Companies: For 1,00,000₹ - 3,00,000₹ per annum depending upon the nature of requirement and the number of filings done by the personnel.

 

Package Offers

 

• Most service providers propose the annual compliance packages for private limited companies which include most of the required filings and compliance, which cost from 15000₹ – 50000₹ depending on the number of services.

 

Other Factors That Contributes to Costs

 

• Size of the Company: Organizations that are large and perhaps have more operations may also have higher compliance costs.

• Location: The fees charged may differ depending on the geographical location of the company and host professional services.

• Type of Business: Other conditions may pertain depending on the industry of the business making the total cost slightly higher or lower.

Overall it can be concluded that the cost of compliance for the private limited company depends on the size of the company, its operations and the professional service providers for compliance services. These are expenses that have to be laid out to allow compliance to be effected on time and properly so as to avert penalties.

 

Disclaimer

 

The information provided in this blog is purely for general informational purposes only. While every effort has been made to ensure the accuracy, reliability and completeness of the content presented, we make no representations or warranties of any kind, express or implied, for the same. 

 

We expressly disclaim any and all liability for any loss, damage or injury arising from or in connection with the use of or reliance on this information. This includes, but is not limited to, any direct, indirect, incidental, consequential or punitive damage.

Further, we reserve the right to make changes to the content at any time without prior notice. For specific advice tailored to your situation, we request you to get in touch with us.