With the Companies Act, 2013, imposing detailed requirements on everything right from incorporating a company or a limited liability partnership to winding up of business, staying on top of your regulatory obligations is essential but may seem intricate and daunting. Let’s have an overview of the statutory compliances from secretarial perspective applicable to Private Limited Companies in India, which will help you navigate the complexities of the essential compliance requirements.

Compliance refers to the act of adhering to established rules, regulations, standards, or laws that are set by governing bodies or organizations. In a business context, compliance ensures that the business entity operates within the legal framework and follows industry-specific requirements to avoid legal penalties, financial losses, or reputational damage.

In India, it’s the Companies Act, 2013 and the relevant Rules that are applicable to a Private Limited Company in addition to Income Tax Act, GST and other sector specific acts.

Companies Act, 2013 requires private limited companies to ensure necessary reports and filings to the Registrar of Companies (ROC) including but not limited to incorporation documents, appointment or resignation of directors, change in designation of directors, increase in share capital, issue of shares or debentures etc. Companies Act, 2013 also prescribes minimum number of board and shareholders meetings to be conducted by private limited companies, qualifications and eligibility criteria of directors to be appointed, disqualification of directors, mode of issue of shares or debentures etc. Every private limited company is expected to adhere to this legislation irrespective of the fact whether it is operational, loss-making or its turnover.

Let’s have a look at the compliances applicable to private limited companies which fall under RoC’s jurisdiction:

Key Compliance Areas

These statutory compliances can be bifurcated broadly in two categories namely:

• Annual Compliances: which include mandatory compliances based on annual filings and disclosures required to be obtained on annual basis, KYC of directors, maintaining statutory registers, timely returns which can also be half-yearly in nature, board meeting and shareholder compliances;
• Event-based Compliances: which include compliances to be followed for event-driven actions such as increase in share capital, change in registered office, appointment or resignation of directors etc.;

Annual compliances:

• Annual General Meeting (AGM):

• First AGM of a company is to be conducted within 9 months from the closure of the first financial year, and thereafter, to be conducted within 6 months from the closure of every financial year, unless requested for an extension.

• Companies are required to ensure that no more than 15 months of gap should pass between the two AGMs. 

• Conducting an AGM requires the private limited companies to prepare notice of AGM, thereafter the minutes of AGM, and necessary resolutions.

• Filing of Annual Financial Statements: 

• E-form AOC-4 (non XBRL / XBRL / IND AS XBRL - as applicable) is to be filed with the RoC within 30 days of conclusion of the AGM.

• The above e-form requires the company to prepare the Director's report in terms of Section 134 of Companies Act, 2013.

• Filing of Annual Returns:

• e-Form MGT-7A (for small companies) or MGT-7, as applicable, is to be filed within 60 days of the conclusion of the AGM.

• Board Meetings:

• Companies Act, 2013 requires a private limited company to hold a minimum of four board meetings each year.

• Necessary documentation including notices, agenda, minutes, and resolutions are required to conduct a board meeting.

• Director KYC:

• Companies Act prescribes that every individual having a Director Identification Number (DIN) is required to submit his KYC by 30th september every year in Form DIR-3KYC. Failure to this compliance attracts a penalty of Rs. 5000/- along with deactivation of DIN. 

• Return of Deposits:

• Every Company is required to file their return of deposits and other non-deposits by 30th June every year.

• Appointment and Reappointment of Auditors:

• The first auditor of the Company is required to be appointed within 30 days of incorporation and the same is to be ratified by the shareholders during the first AGM of the company. 

• E-form ADT-1 for the appointment of auditors is to be filed within 15 days of the appointment with the RoC.

• Statutory Registers and Records:

• Maintenance of statutory registers (Register of Members, Register of Directors, etc.) is to be done on a regular basis.

Event-driven Compliances:

• Increase in authorised share capital of the Company;

• Allotment of shares by way of rights issue, preferential allotment or private placement;

• Changes in Directors either by way of appointment, resignation, removal or disqualification;

• Change in designation of a director;

• Change in registered office of a company, from - within the city limits to from one State to another

• Availing loan facility etc.

• Consequences of Non-Compliance:

• There are penalties and fines prescribed for failing to meet secretarial compliance.

• It also affects the reputation as well as the legal ramifications to the company. 

• Best Practices for Secretarial Compliance:

• Tips for maintaining proper documentation.

• Leveraging digital tools for compliance tracking.

• Importance of timely filings and maintaining a compliance calendar.

Seamless Compliance Solutions by Instabizfilings

At Instabizfilings, we have a team of expert and qualified Company Secretaries who will ensure that your company is absolutely compliant with applicable laws by sending you timely reminders of the due-dates and a checklist of documents required to ensure timely reportings and filings.

See how our expertise can benefit you:

Know Your Company Compliance (KYCC) tool:

This smart tool is developed by our Compliance Engineers that help you track and manage all your compliances at one click. Our key Advanced Compliance Check Report gives you the detailed list of Compliances applicable to your Company on the basis of Capital, Borrowing, Networth, Turnover and Profit Before Tax.

Experience our solutions and support. Let us be your trusted partner for all solution needs. Get started now!

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.