Registering a company as a Private Limited entity is a popular choice for many entrepreneurs due to its benefits like limited liability, perpetual succession, and ease in raising capital. However, with these advantages come certain regulatory compliance requirements that are imperative to maintain the active status of the company and avoid penalties.
In India, the Registrar of Companies (RoC) is the designated authority that deals with the administration of companies. Let’s dive into the various compliances a Private Limited Company must adhere to in accordance with the RoC:
1. Annual Returns – Form MGT-7
Every Private Limited Company is mandated to file its Annual Returns using Form MGT-7 within 60 days of holding its Annual General Meeting (AGM). This form provides a comprehensive overview of the company’s activities during a financial year.
2. Financial Statements – Form AOC-4
Companies must prepare and file their financial statements, which include the Balance Sheet, Profit & Loss Account, and other relevant documents. Form AOC-4 must be filed with the RoC within 30 days of the company’s AGM.
3. Appointment of Auditor – ADT-1
Within 30 days of incorporation, the company must appoint its first auditor, and this appointment should be informed to the RoC using Form ADT-1 .
4. Annual General Meeting (AGM)
It’s mandatory for a Private Limited Company to hold an Annual General Meeting (AGM) once every year. This meeting should ideally be within six months from the end of the financial year.
5. Director’s Report
The Board of Directors should prepare a detailed report that encompasses the state of the company, its financial health, and other material facts. This report is to be presented at the AGM.
6. Income Tax Returns
Besides RoC filings, the company must file its income tax returns annually with the Income Tax Department.
7. Maintaining Statutory Registers
Companies should maintain and update statutory registers like the Register of Members, Register of Directors, etc., as required by the Companies Act.
8. Informing RoC about Key Changes
Any significant change within the company, be it a change in directors, alteration of the Memorandum of Association or Articles of Association, issue of new shares, or change in the registered office, must be promptly informed to the RoC using the respective forms.
9. Active Company Tagging Identities and Verification (ACTIVE) – Form INC-22A
Introduced to identify shell companies, ACTIVE compliance mandates companies to verify registered offices. Companies that do not file this form risk having their names removed from the RoC’s register.
10. Event-Based Filings
Certain events, such as changes in share capital, loans from directors, or changes in directorship, require specific filings with the RoC.
11. KYC of Directors – DIR-3 KYC
Every director of the company needs to complete their KYC on an annual basis using the DIR-3 KYC form. This helps in verifying the details of the directors.
12. Resolutions and Agreements
All resolutions passed and agreements made at Board Meetings or AGMs should be filed with the RoC.
Penalties for Non-Compliance
Failing to adhere to the compliance requirements can lead to hefty penalties and even the potential striking off of the company’s name from the RoC’s register. It’s imperative to stay updated with due dates and ensure timely filings.
Conclusion
Running a Private Limited Company demands strict adherence to regulatory norms. While it might seem overwhelming, these compliances ensure transparency, credibility, and smooth functioning of the corporate ecosystem. If unsure, always consult with a corporate lawyer or a company secretary to navigate the complexities and stay compliant.
I hope this detailed blog helps entrepreneurs and business owners understand the significance of RoC compliances for Private Limited Companies. Remember, staying compliant is not just about avoiding penalties; it’s about upholding the integrity and reputation of your business.
