Private Limited Company Annual Filing & Compliances


In India, all private firms are under the obligation to follow or abide by a set of rules and regulations, which are specified under the Companies Act of 2013. As some of these rules and regulations are a bit complicated, the basic ones are expected to be necessarily compiled by all the private Companies. So in today’s article, we are going to see these rules and regulations in detail.

Private Limited Company is one of the most favorite legal entity types for startups and businesses operating all over in India. However, some of these startups and businesses are mostly unaware of the set of compliances required to be fulfilled as a Private Limited Company, while preparing for the Annual Compliances. 

Annual compliance for private limited company

Companies Act of 2013 :

The meaning and scope of Private Limited Companies have significantly changed after the commencement of the Companies Act 2013. While the legal and realistic issues are becoming an obstacle for the increasing number of startups, they are facing a lot of problems in running and organizing private corporations. In addition to this, the laws under the Companies Act of 2013 are imposing various conditions and compliances to limit the growth of private companies by way of complicating it further.

In order to avoid certain unnecessary penalties, it is always advised for Private Limited Companies to take the assistance of experts compliance firm to comply with all the required ROC Annual compliances under the law, as it is not so easy for a single person to understand the compliances all by himself. We have already explained some of the essential compliances as given below:-

Procedure for Annual Filing :

As per the Company Act of 2013, it is mandatory for each and every company (except OPC) to file their annual returns at the end of each year. The companies should audit their financial statements, prepare audit reports, hold meetings and carry out certain tasks before filing the annual returns. The procedure may seem a bit complex but it is actually very easy. Let us see how it is done!

Accounts Finalization 

Finalization of Accounts refers to the preparation or closing of the books of accounts of the business firm. And as specified in the Company Act 2013, maintaining the book of Accounts is mandatory for all the companies. This ensures the smooth functioning of the firm and gives an idea about the profit & loss and the financial position of the business. Despite this, it will be very difficult in filing regulatory filing such as GST returns, TDS returns, Income Tax Returns, Statutory Audits, the absence of proper book of accounts. For Companies Final Accounts has to be in compliance with Accounting Standards and recently Introduced Ind AS. The Format should also be per Schedule provided in Companies Act 2013

Board Meeting

Once the company is incorporated, the meeting of the Board of Directors should be held within 30 days. And the notice for this meeting must be sent separately to all members either physically or through email before 21 days clear notice. A total of four meetings of the board of directors should be held throughout the year and the gap of 120 days must be ensured between these meetings. 

 Statutory Audits. 

Statutory Audits provides information about the company’s financial position by auditing the financial statements of the company involving bank balance, financial transactions, etc. As per the Company Act of 2013, it is mandatory for every company to appoint an Auditor to audit all the financial statements or accounts of the company and then must present their report before the authority. The appointment of the auditor must be done within one month from the date of incorporation of the company.

Annual General Meeting (AGM)

The meeting of shareholders of a company is known as the Annual General Meeting, which must be held once in a year, as made mandatory by the Company Act of 2013. In case, if the company is newly incorporated, then the first AGM should be held within 18 months. However, for other pre-existing companies, the time period between two AGMs must not more than 15 months. In the Annual General meeting Finalised and Audited Financial statements are placed in front of members and Approved or objected. Once the duly audited financial statement is approved /Adopted in the AGM Than it can be taken for Annual Filing of Accounts with Registrar of Companies (ROC). 

 Annual ROC filing

The Annual ROC filing refers to the filing of Annual Returns with the Registrar of  Companies. The filing of Annual returns with the ROC (Registrar of Companies) within 60 days of the last held Annual General Meeting is mandatory for every Company. It should be done in e-form MGT 7 available at the MCA website, which shall be digitally signed by at least one Director and is certified by the Company Secretary.

Documents Required for ROC Annual Filing

  1. Audited Financial Statement

Within 30 days of last held AGM, the audited financial statements should be submitted at the MCA portal in Form AOC 4, which is required to be certified by the company secretary and digitally signed by at least one of the proposed Directors of the Company.

  1. Statutory Audit Report

The Statutory Audit Report is prepared by the auditor after auditing the financial statements and accounts of the company. This report is required to be submitted before the members and directors of the company. It provides info about the company’s financial affairs and various operations carried out by the company.  

  1. Directors Report

Under Section 134 of the Companies Act, the directors’ report should be prepared and duly signed by Managing Partner and one more director. It is an annual statement from directors covering all operations during the year, dividend declaration, net profit, Various initiatives by companies, CSR, etc. The Director Reports holds all-important disclosure and information which the Managing Director needs to be reporting as per disclosure norms of Companies Act 2013.

  1. AGM Minute of Meeting

The minutes of the meeting should be concluded within 30 days after the meeting being held. It is the official written record of the meeting, in which the number of attendees, the quota of the meeting, issues discussed, decisions are taken and other details of significant importance are framed or enlisted. It may prove to be written data of evident value. 

Penalty for Not filing Annual Return

The Company Act of 1956 stated some penalties for non-compliances and not filing the annual returns of the company. The penalties may be in a form of fine or often imprisonment of the officer in default. In case, if there is any lapse in the filing of annual returns, additional filing fees will be charged, whereas a delay in filing of annual returns may result in the following penalties :

Sr. Period of Delay in Filing of Annual Returns Penalty (Current) Penalty (Up to)
1. Delay up to 15 days  Rs. 400 Rs. 3,000
2. Delay up to 30 days  Rs. 800 Rs. 6,000
3. Delay up to 60 days  Rs. 1,600 Rs. 12,000
4. Delay up to 90 days  Rs. 2,400 Rs. 18,000
5. Delay up to 180 days  Rs. 4,000 Rs. 36,000
6. Delay up to 270 days  Rs. 4,800 Rs. 54,000
7. Delay more than 270 days  Rs. 100/day  Rs. 100/ day /form.

company registration

Final Verdict

As explained earlier, a company should always be aware of all the necessary compliances which are to be fulfilled and other compliances such as, preparation of MOA, display of company identity, Unsecured Loans to be accepted as gift only, the board of directors’ meeting, the appointment of the auditor, director’s report and filing of annual returns or income tax returns, too. 

And all these compliances is must be fulfilled within the given time limit only so that the unnecessary defaults and issues will be avoided. Even though, if you have any kind of doubts in regard to any compliances mentioned above, then we are here to help you out, feel free to contact us through the comments.

There is a great myth among first-time directors of private limited Companies that the annual compliance needs to be done once there is any business. If there is no business No Annual filing for Private limited companies is required, which is completely wrong. Any Incorporated private limited company needs to file its Annual compliance return whether there is any activity or not. 

Further, It is always advisable to keep consulting your CA for the issues related to private limited company compliance and operations, As the penalty provided in Companies Act, 2013 for misadventure is quite huge. 

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