Annual Compliances of Private Limited Company

Successfully incorporated a company What Next? As you are aware that nothings come free. After forming a company, you are required to bear the cost of annual compliances which helps you to carry on your business hassle free.

Once the company is formed these annual compliances are to be followed mandatorily:

MANDATORY COMPLAINCES

  • ISSUANCE OF SHARE CERTIFICATE:

The company is mandatorily required to issue Share Certificate to the shareholders within 2 months of forming a company

However, the company will be liable to penalty starting from Ra. 25000/- which may extend to Rs.500000/-. Also note the director will also be liable to penalty of Rs. 10000/- which may extend to Rs. 100000/-.

  • MAINTENANCE OF STATUTORY REGISTER:

Every company formed is required to maintain statutory registers such as register of members, debenture holders, register of loans etc.

Noncompliance in maintaining the statutory register by the company shall be liable to a penalty of Rs.50000/- which may extend to Rs. 300000/-. Also note if the default continues the penalty shall extend to Rs.1000 per day up to the day till the default continues.

  • HOLDING OF BOARD MEETING:
  • The company is required to held first board meeting of the director within 30 days of its incorporation.
  • During the financial year the board of director have to meet 4 times on quarterly basis.
  • The Board meeting should be held following a procedure which includes drafting of notice, preparing the agenda, drafting the minutes to note the discussion of the meeting and maintenance of the attendance register etc.

 

The company shall be liable to a penalty of Rs.25000/- in failure of holding the Board Meeting in timely manner.

  • HOLDING OF ANNUAL GENERAL MEETING(AGM):
  • The company is mandatorily required to hold the AGM every year. For holding an AGM, it is compulsorily required to send a notice in advance to all the shareholders/members.
  • Maintenance of attendance register and drafting of minutes is mandatory which states the number of shareholders attended the meeting and what all discussions are held during the AGM.

Non-compliance by the company and directors in holding an AGM shall be liable to a penalty of Rs. 100000/- which may extend to Rs.5000 per day in case the default continues.

However, the penalty may further extend up to Rs. 25000/- to the company in case it fails to maintain the minutes’ book as required. In addition to this the director in default shall be liable to a penalty of Rs.5000/-

  • ROC FILING:
  • Every company is required to file its Annual Return (MGT 7) with the ROC within 60 days of the AGM.
  • The financials of the company are to be filed within 30 days of holding the AGM
  • Appointment of Auditor is to be filed within 15 days of holding the AGM
  • If there is any delay in ROC filing the ROC fees may extend up to 12 times the normal ROC filing fees.

Non-compliance by the company with regards to filing of annual return shall be punishable with a fine up to Rs. 50000/- which may extend to Rs.500000/-.

However, director in default shall be liable to a penalty of Rs.50000/- which may extend up to Rs.500000/- or shall be punishable with an imprisonment up to 6 months or both.