What to do post Private Limited Company Formation?
Private Limited Company is the most popular form of business entity In India. Companies Act, 2013 and Companies (Incorporation) Amendment Rules, 2019 regulates all rules and regulations for incorporation of companies in India. Once the company gets registered successfully on Ministry of Corporate (MCA) portal, there are some post incorporation compliance which need to be complied with. Management of company should be aware about all the applicable compliances. Non-compliance may attract late filing fees and penalties on Company as well as directors. We have summarized these relevant laws below:
Compliance #01- Deposit of Paid up capital
Paid up capital should be deposited in the bank account of company. This refers to the amount that the promoters have provided while incorporating the company.
Compliance #02- File form INC 20 A
Post deposit of the initial paid up capital in the bank account; the company needs to file form INC 20a within 180 days of incorporation. This form needs to be filed with ministry of corporate affairs. Form-INC 20A is the declaration for commencement of business.
Non fiing of INC 20A will attract penalty of –
Compliance #03- Appointment of auditor
Every private limited company needs to appoint its first auditor within 30 days of incorporation of the company. The auditor so appointed shall continue to be auditor of the Company till the completion of the first AGM of the company. The notice of auditor appointment needs to be done in a Board meeting and then filed with MCA within 15 days of such board meeting.
Compliance #04- KYC of Directors
KYC of directors is to filed in form DIR 3 KYC with ministry of corporate affairs within 6 months from the end of financial year. This needs to be done every year without which the Director Identification Number (DIN) may be classified as de-activated. Once de-activated, a penalty of Rs. 5,000 will be levied for re-activation.
Compliance #5- Annual General Meeting
Annual general meeting should be held every year within six months from the end of financial year. The Director’s provide a summary of the company’s operations at every annual AGM. The Companies audited financial statements are also adopted at the AGM.
File financial statement and other documents in form AOC 4 with MCA within 30 days of AGM.
Compliance #6- Filing Form AOC-4
The financial statements are adopted in AGM by the shareholders. The adopted financial statements are then required to be filed with Ministry of Corporate Affairs with 30 days from the AGM. It is filed in Form AOC-4
Compliance #7- Filing Form MGT-7
Every company needs to submit the annual return with Ministry of Corporate Affairs (MCA) at the end of every year. The Annual return contains details of shareholding of the company. The filing is done in Form MGT-7 within 60 days of AGM.
Compliance #8- Income Tax Return
Every company is also required to comply with the provisions of Income Tax Act 1963. Under the provisions, the company is required to file income tax return annually before 30th September, of the succeeding financial year.
Compliance #9- Re-appointment of auditor
At AGM, the auditor needs to be re-appointed or a new auditor needs to be appointed for the next 5 years. The intimation of auditor appointment needs to be filed within 15 days from such appointment.
Late fees and penalties are applicable on all the above forms if the said forms are not filed on time. There are heavy late fees and penalties for delay in filing any form/return and the applicable fee varies with amount of delay as well as different form types.
Apart from the compliances listed above, there are some other compliance which a company may be required to do. These compliances are transactional in nature and need to be done as and when a particular event takes place. Some of these compliances are listed below:
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