Annual compliances of private limited company

Annual compliances of private limited company | How to Register 2020

A private limited company is a popular legal entity in India. Private limited companies in India are governed by the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013. Under this act, it mandatory for every company, post-incorporation, has to fulfill some, mandatory legal obligations. The compliance requirements are complex with each falling on different due dates and failing to meet them in a timely manner can greatly impact a company.

This may include paying heavy penalties (up to Rs. 1 lakh a year) or the companies and their directors getting blacklisted for a short period of time.

Benefits of filing annual compliances of private limited company-:

Increased Credibility:

Filing annual compliances increases the credibility of your company. As a result, it’s easy for such companies to avail financial help and market credit from the concerned authority.

Transparency of company:

Filing annual returns and other such compliances show transparency of the company. It explains the condition of the company and the annual financial transactions in a clear way.

Legal Penalties for non- compliance:

If a company fails to file the compliances, it may lead to heavy penalties of a minimum of 25000 to 50,0000 rupees. Hence, it’s always advisable to meet the compliances on time to avoid any legal complications in the future.

Build trust:

Whether it is a customer or vendor or supplier or the regulatory body, everybody trusts those companies who file compliances on time and are quite open about their financial details. Such companies have better credibility; and hence, find it easy to build trust among everybody.

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How to file annual compliance of private limited company?

Six easy steps to file annual compliance of private limited company-:

  • Board of Directors meeting-:Every company must a board of directors meeting within 30 months of incorporating a company. All the members of the Board of directors must be present in the meeting.
  • Appointment of auditor-:An auditor must be appointed within one month from the date of starting the company. Every accountant must prepare accounts and get the assent of the auditor at the end and shall provide an audit report which is a must. Failure in doing this will lead to great penalties.
  • Directors Report-: Most importantly directors report must be prepared as mentioned under the Sec 134 of the Companies Act which covers operations during the year, net profit, dividend declaration, etc. The company must also issue a share certificate within 60 days of starting the business.
  • File annual return return-: The final step is to file an annual return as it is mandatory that every company must file its annual return with register of the companies within 60 days of the annual general meeting in e-form available at, which has to be digitally signed by at least one of the directors. These two forms are required to file-:
    1. Form MGT-7 (Annual Return)
    2. Form AOC-4 (Financial Statements)

Annual compliance consists of the following information and documents-:

  • Balance Sheet of the Company
  • Profit & Loss Account
  • Compliance Certificate
  • Registered Office Address
  • Register of Member
  • Shares and Debentures details
  • Debt details and information about the Management of the Company