September 20, 2018

Annual compliances of Pvt Ltd Companies is a tough nut to crack: Handle them with care

To avail the benefits and relaxations extended by the Government of India under "Startup India" scheme, the startups have to fulfil certain eligibility criteria. One of the major criterion for a startup is to incorporate as a Private Limited Company, a Limited Liability Partnership (LLP) or a Partnership Firm.


Many start-up founders and small business owners prefer the private limited company as compared to LLP or a partnership firm because it provides more creditworthiness for the loan providers and sound legal existence.


Every private limited company has to fulfil the annual compliances as laid down by various statutory laws and the Companies Act, 2013. Following are the significant compliances which a private limited company has to fulfil in any particular FY -


Appointment of auditor

The first auditor has to be appointed within 30 days of the incorporation of the company, and he will be appointed for 5 years. For this, the company has to file Form ADT-1 in the first year. At each subsequent AGM, the appointment will be ratified, but there is no requirement of filing ADT-1 again.


Board Meetings

A company has to conduct at least four board meetings during an FY, and ensure that the gap between two consecutive board meetings shouldn't be more than 120 days. The company is required to conduct the first board meeting within 30 days of incorporation.
Small companies, i.e. private limited companies having paid up capital less than Rs. 50 lakh and turnover less than Rs. 2 crores can conduct two board meetings in an FY, out of which one has to be conducted at least in each half calendar year.


Annual General Meeting

A company can hold its first AGM within a period of 18 months from the date of incorporation, but the date of AGM should fall within 9 months from the end of financial year, in which the company is incorporated. Subsequent AGMs should be held within 6 months from the end of the relevant financial year.


The company should ensure that at least one AGM is conducted in every financial year and the gap between the two AGM should not be more than 15 months.


Signing the audited financial statements

The company has to get its accounts audited by a practising chartered accountant and obtain the statutory audit report. The audited financial statements will be signed by the managing director, CEO, CFO and the Company Secretary.


Board of Directors' report

The company has to prepare a board report which will contain the details related to the background of the company, operations during the year, net profit earned, dividend declared and the various compliances met by the company.


Filing of financial statements

A company has to file its financial statements with the RoC within 30 days of holding the AGM in E-form AOC-4. The form has to be digitally signed by the director and the practising company secretary or chartered accountant.


Filing of annual return

A company has to compulsorily file the annual return within 60 days of holding the AGM in E-Form MGT-7. The form will be digitally signed by the director and the practising company secretary.


Maintenance of statutory registers and minutes

A company has to maintain certain statutory registers such as the register of members, sweat equity shares, loan, investment and guarantee, charges etc. Also, the company has to record minutes of every board or general meeting and preserve them for future reference.


How can Especia Associates LLP assist you?

Our team comprising of experienced professionals like Chartered Accountants, Company Secretaries and Lawyers stay on toes to assist you in duly complying with all the statutory laws. We maintain a calendar of the annual compliances for every client, which enables us to track the progress of completion. Our liasioning with various government departments help us in filing the ROC forms, and other required documents hassle-free, quick and before time. With us, you can always remain tension free regarding compliances and reporting requirements.

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