Mandatory Compliances Checklist for a Private Limited Company

Introduction

Private limited companies in India are governed by the Companies Act under the Ministry of Corporate Affairs (MCA). According to the MCA, every private limited company is bound to discharge mandatory secretarial compliance filings or RoC compliance within the due dates fixed to avoid facing penalties.  In this article, JusIP brings you a Mandatory Compliances Checklist for a Private Limited Company.

Board Meeting

• For a public limited company, there should be at least four board meetings conducted in a calendar year.
• For a private company at least two board meetings should be conducted.
• 1/3rd of the total number of directors or a minimum of 2 directors, whichever is greater, should be present at the meeting.
• The above should be intimated at least 7 days prior regarding the agenda of the meeting.
• Minutes of the board meeting is to be kept at the registered office of the company.

Annual General Meeting (AGM)

• One AGM should be held every year and a gap of 15 months should subsist between two AGMs. Likewise, the purpose of an AGM is to discuss the financial statements of the company, appointment of an auditor, declaration of dividend, remuneration, etc.
• Every Notice of the Annual General Meeting will be prepared as per Section 101 of the Companies Act, 2013 and Secretarial Standard – II.

Appointment of the Auditor (Form ADT-1)

• Companies must appoint their first auditor within 30 days of incorporation.
• The first auditor is to be appointed for five years and the appointment must be filed before RoC using Form ADT-1.
• When a new auditor is appointed by a company within 15 days from the date of the annual general meeting, form ADT-1 is to be filed with the RoC.

Director Disclosure (Form MBP-1)

The next aspect which is a on the Mandatory Compliance Checklist is filling the Director Disclosure Form. All the directors of a company are required to file form MBP-1 to disclose their interests in any other company. Such disclosure is to be made every year at the first board meeting.

• Directorship of other company
• Partnership firm where he/she is partner
• Shareholding of more than 2% in other Company
• List of relatives of Director

Further, in case of the appointment of a new director, the qualifications of the new director are to be taken as a declaration.

Disclosure of Non-Disqualification by Directors (Form DIR-8)

Every Director of the Company in each Financial Year will file with the Company disclosure of non-disqualification. It is declaration that Director was not disqualified to act as Director during the FY 2020-21. (i.e. previous FY). The due date is every first Board Meeting of the of relevant Financial year.

KYC of Directors – Form DIR – 3 KYC and Web KYC of all Directors

• KYC of Directors requires verification of email OTP and mobile OTP both at a time.
• If email or mobile number of Director is changed filing of DIR-3 KYC is required. For change in other details of Director such as address form DIR-6 is required to be filed.
• Due date is on or before 30th September every year for all the directors of the Company.

Board Meetings – 173 & SS-I

• Every Company shall hold a minimum number of FOUR meetings of its Board of Directors every year in such a manner that maximum gap between the two meetings should not be more than 120 (One hundred twenty) days.
• Notice of Board Meeting must be given 7 days prior to the meeting. Notice can be delivered either by hand, through registered post or electronic means.

Appointment/Resignation/Change in Designation – Form DIR-12 of Director

• If there is change in designation of Director at the AGM or Appointment or Resignation of Director.
• Regularization of Additional Director
  • If company wants to appoint additional director as director, then it shall regularize the person as director in General Meeting by passing Shareholder Resolution. File form DIR-12 for Change in Designation of Director along with ordinary resolution within 30 days of AGM.

Filing Special Resolution : Form MGT-14

• Filing of resolutions with the ROC regarding Board Report and Annual Accounts. The details of the resolutions passed should be filed.
• Special resolution passed in AGM. Due date is within 30 days of AGM.

Return of Deposit: Form DPT-3

Return of deposits that companies must file to furnish information about deposits and/or outstanding receipt of loan or money other than deposits.

Accounts to be audited by a Statutory Auditor

For preparing/verifying the annual report and financial statement and to get the financial report audited, every company should have a statutory auditor who shall compulsorily audit the same.

Filing of Form MGT-7

Every company has to file Form MGT-7 within 60 days from the date of conducting the annual general meeting. It should contain the following information:

• Details of the board and member meeting
• Registered office and principal place of business of other holdings and associate companies
• Debenture holders/members including the changes made
• Key managerial personnel, directors and promoters with mention of the changes made
• Remuneration of directors and key managerial personnel
• Details of the legal matters that the company is involved in
• Details of any penalty or fine imposed on the company
• Shareholding pattern
• Debentures, shares, and other securities
• Liability or indebtedness
• Certification of compliance matters.

These details will be open for public inspection in case of any dispute or any matter arising thereof. In case of default in filing the annual return, a fine of ₹100 will be imposed per day of default.

Filing of Financial Statement (Form AOC-4)

• This filing is also a mode of communication between the shareholders and the board of directors of the company.
• This form informs the shareholders about their investment and discloses all the financial transactions done in the financial year.
• Further, this formality should be discharged within 30 days from the date of the annual general meeting. It should include the following:
  • Balance sheet
  • Details of the particulars on the balance sheet
  • Details of corporate social responsibility
  • All the related party transactions that the company have entered into
  • Details of the profit and loss account
  • The audit report and any other miscellaneous transactions (both directors and secretarial audit)
  • Particulars about the auditor and board meeting should also be filed.

Statutory Audit of Accounts

• Preparing their accounts and getting them audited by a chartered accountant forms an important part of the Mandatory Compliance Checklist. This has to be done at the end of the financial year. Moreover, those audit reports and financial statements should be filed with the registrar.

Maintenance of Statutory Registers

Maintaining statutory registers, minutes of board meetings, AGM, creditors meeting, debenture holder meetings are mandatory.

Company will maintain the following mandatory Registers:

• Register of Director,
• Registers of Director Shareholding,
• Registers of Members
• Registers of Transfer
• Registers of Related Party transaction etc.

Other register as per companies act , 2013

Appointment of Company Secretary – Section 203

Private Company having paid up share capital of Rs. 5 crore more required to appoint whole time Company Secretary.

Event Based Compliances

These are triggered based on happening of certain events.

1. Change in Director / KMP
2. Increase in Authorized Share Capital
3. Increase in Paid-up Share Capital
4. Change in registered office
5. Change in secured borrowing (Creation, modification and satisfaction of charge)
6. Change of name of company
7. Conversion of company
8. Filing of resolution and agreements
9. Revision in payment of remuneration to Managing or whole time Director
10. Appointment/ resignation of Auditors
11. Declaration of Dividend
12. Transfer of unpaid/ unclaimed dividend to IEPF
13. Loans given to other Companies
14. Repayment of Loan in full for satisfaction of Charge
15. Transfer of shares

Other Compliances

In addition to the above-mentioned mandatory compliance filings some of the non-RoC compliance for private limited companies are:

• TDS/TCS payment
• GST payment and GST filing
• Other payments of periodic dues
• Filing of quarterly TDS returns
• Advance tax payment
• Filing of IT returns
• Filing of tax audit reports
• Tax audits.

Conclusion

Any business registered in India is must mandatorily comply with the various legal requirements as laid down above. In conclusion, as is evident from a perusal of the checklist, it is clear that irrespective of the turnover or the capital amount it is imperative that the Company must comply with the annual mandatory compliance checklist.