Annual compliances for a Private Limited Company in India are essential to ensure the company’s legal and financial health, maintain transparency, and comply with the Companies Act, 2013, and other applicable laws. Below are the key annual compliances that a Private Limited Company in India must adhere to:
1. Annual General Meeting (AGM)
- Hold the AGM within six months from the end of the financial year. In the AGM, various matters are discussed, and financial statements are presented for approval.
2. Financial Statements
- Prepare and finalize financial statements for the financial year, including:
- Balance Sheet: A snapshot of the company’s financial position, showing assets, liabilities, and shareholders’ equity.
- Profit and Loss Account: A summary of the company’s revenue, expenses, and profit/loss during the financial year.
- Cash Flow Statement: A statement showing the company’s cash inflows and outflows during the financial year.
3. Director’s Report
- Prepare a Director’s Report that includes information about the company’s operations, financial performance, future prospects, and Corporate Social Responsibility (CSR) activities.
4. Auditor Appointment
- Appoint an Auditor and ensure that the auditor’s appointment is in compliance with the relevant provisions of the Companies Act.
5. Annual Return Filing
- File the Annual Return with the Registrar of Companies (ROC) within 60 days of the AGM. The annual return contains details about the company, its shareholders, directors, and other relevant information.
6. Income Tax Returns
- File the company’s income tax returns with the Income Tax Department within the due date. Companies must also obtain a tax audit report if their turnover exceeds a specified limit.
7. Statutory Registers
- Maintain and update various statutory registers, such as the Register of Members, Register of Directors, Register of Contracts, etc., as required by the Companies Act.
8. Board Meetings
- Hold regular Board Meetings as required by the Companies Act. The Act specifies the minimum number of meetings that must be conducted in a year.
9. Compliance with Other Laws
- Comply with other laws and regulations applicable to the company, such as Goods and Services Tax (GST) laws, labor laws, environmental laws, etc.
10. Compliance Certifications
- Obtain compliance certifications from the company’s directors or officers affirming that the company has complied with all applicable laws and regulations.
Penalties for Non-Compliance
Non-compliance with annual compliances services can attract penalties and fines. Additionally, it may lead to legal action against the company and its directors, which can negatively impact the company’s reputation and business operations.
It’s important for Private Limited Companies in India to be diligent in fulfilling their annual compliance requirements. Many companies hire professionals or chartered accountants to assist them in meeting their compliance obligations accurately and on time. This ensures that the company operates smoothly, maintains good corporate governance practices, and builds trust among stakeholders.