Compliances of Private Limited Company
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Compliances of Private Limited Company
Compliance refers to the act of adhering to laws, regulations, standards, or guidelines. Compliances refers to the process of ensuring that a company or organization follows all applicable laws, regulations, and all internal policies that governs its operations. Annual compliances of private limited company encompass a range of regulatory obligations that the company must fulfill on an annual basis to ensure legal compliances, transparency and accountability to its operations.
Compliances include:- Immediate After Registration
- MCA Compliance
- GST Compliance
- Income Tax Compliance
- ESIC/EPFO Compliance
- Accounting
Immediate After Registration
1. INC-20A
INC-20A is a declaration filed by a company with the Registrar of Companies (ROC) under the Companies Act, 2013, to confirm that the company has commenced its business operations.
- Purpose: To declare the commencement of business and verify that:
- The subscribers to the memorandum have paid the value of shares agreed upon.
- The company has opened a bank account in its name and deposited the subscription money.
- Due Date: Before 180 days of incorporation
- Penalty: Up to 12 times the normal fees
2. ADT-1: First Auditor Appointment
After incorporation of a Private Limited Company, the appointment of the first statutory auditor is a mandatory compliance under the Companies Act, 2013.
- Purpose: The first auditor plays a critical role in ensuring statutory compliance and financial transparency for a newly incorporated company.
- Due Date: Within 30 days from the date of incorporation.
| Particulars | Penalty |
|---|---|
| Company | ₹10,000 + ₹1,000/day (continuing default) |
| Every Officer in Default | ₹10,000 + ₹1,000/day (continuing default) |
| Maximum limit | ₹2,00,000 (company), ₹50,000 (per officer) |
3. Share Certificates Issue
After a company is incorporated, it must issue share certificates to its shareholders as evidence of ownership. This is a statutory requirement under the Companies Act, 2013.
- Purpose: A share certificate is a legal document that serves as proof of ownership of shares in a company. It is a vital instrument in corporate governance and shareholder management.
- Due Date: Within 2 months (60 days) from the date of incorporation or allotment.
| Defaulter | Penalty |
|---|---|
| Company | Minimum ₹50,000 and may extend up to ₹5,00,000 |
| Every officer in default | Minimum ₹10,000 and may extend up to ₹1,00,000 |
ROC Compliance
1. DIN KYC (DIR-3KYC / DIR-3KYC WEB)
Every person who holds a Director Identification Number (DIN) must annually file KYC with the Registrar of Companies (ROC) as per Rule 12A of Companies (Appointment and Qualification of Directors) Rules, 2014.
- Purpose: To keep the DIN of the directors activated.
- Due Date: 30th September of every financial year.
- Penalty: Rs. 5000
2. DPT-3
Form DPT-3 is a return that companies (except government companies) must file annually to the Registrar of Companies (ROC), providing details of: Deposits accepted by the company, and Outstanding loans, debentures, and other non-deposit borrowings.
- Purpose: To maintain transparency regarding the money received by the company from the public, directors, shareholders, banks, or any other sources. Helps the ROC monitor whether the funds raised are in the nature of deposits or exempted borrowings.
- Due Date: Before 30th June of every Assessment Year.
- Penalty: Up to 12 times the normal fees
3. ADT-1
Form ADT-1 is a statutory form filed with the Registrar of Companies (ROC) to inform about the appointment of an auditor under Section 139 of the Companies Act, 2013.
- Purpose: To intimate the ROC about the appointment of the company’s statutory auditor.
- Due Date: Within 15 days of AGM
- Penalty: Up to 12 times the normal fees.
4. AOC-4
Form AOC-4 is an annual filing form under the Companies Act, 2013, through which every company submits its audited financial statements to the Registrar of Companies (ROC).
- Purpose: To report the company’s financial position for the financial year. Mandatory for maintaining transparency, accountability, and statutory compliance. Enables ROC and stakeholders to assess the company's performance.
- Due Date: Within 30 days from AGM.
- Penalty: Rs. 100 per day.
5. MGT-7 / MGT-7A
Form MGT-7 is an annual return filed by companies with the Registrar of Companies (ROC) under Section 92 of the Companies Act, 2013. It contains key information about the company’s structure, shareholders, and governance.
- Purpose: To provide a snapshot of the company’s structure as on the financial
year-end. Like:
- Shareholding pattern
- Directors and KMP
- Debentures and other securities
- Company’s overall compliance position
- Due Date: Within 60 days of AGM
- Penalty: Rs. 100 per day.
GST Compliance
1. GSTR-1
GSTR-1 is a monthly or quarterly return that must be filed by registered GST taxpayers to report their outward supplies (sales) of goods or services.
- Purpose:
- To declare sales invoices, credit notes, and debit notes issued during the period.
- Enables buyers to claim Input Tax Credit (ITC) via auto-populated GSTR-2A/2B.
- Facilitates transparency and tax reconciliation under GST.
- Due Date:
Filing Type Due Date Monthly 11th of next month Quarterly 13th of month following quarter - Penalty:
Type Penalty Late Filing Fee ₹50/day (₹25 CGST + ₹25 SGST) Nil Return ₹20/day (₹10 CGST + ₹10 SGST)
2. GSTR-3B
GSTR-3B is a summary return that must be filed monthly or quarterly by all regular registered taxpayers under GST. It captures outward and inward supply summaries, GST liability, and ITC claims.
- Purpose:
- To declare summary of sales and purchases.
- To compute and pay GST liability.
- Mandatory for claiming Input Tax Credit (ITC).
- Due Date:
Filing Frequency Due Date Monthly 20th of next month Quarterly (QRMP) 22nd or 24th of next month (depends on state) - Penalty:
Type Late Fee Normal Return ₹50/day (₹25 CGST + ₹25 SGST) Nil Return ₹20/day (₹10 CGST + ₹10 SGST)
3. GSTR-9
GSTR-9 is an annual return that must be filed by regular GST-registered taxpayers, summarizing all monthly/quarterly returns (GSTR-1 & GSTR-3B) filed during the financial year.
- Purpose:
- To provide consolidated summary of outward/inward supplies, ITC, taxes paid, and refunds.
- Ensures reconciliation with books of accounts.
- Acts as self-certification for annual compliance.
- Due Date: 31st December of the assessment year
- Penalty:
Type Late Fee Standard ₹200/day (₹100 CGST + ₹100 SGST) Maximum 0.25% of turnover in the State/UT
4. GSTR-9C
GSTR-9C is a reconciliation statement between GSTR-9 and audited financials, certified by a CA or Cost Accountant.
- Purpose:
- To reconcile differences between GSTR-9 and audited books.
- Acts as a self-certified audit to ensure declared GST is accurate.
- Due Date: 31st December of the assessment year
- Penalty:
- Same as GSTR-9: ₹200/day (₹100 CGST + ₹100 SGST)
- Maximum: 0.25% of turnover in the State/UT
- Department may issue notices for non-compliance or misreporting
- Additionally, the department may issue notices for non-compliance or misreporting
Income Tax Compliance
Income tax compliance means timely and accurate fulfilment of obligations under the Income-tax Act, 1961, including return filing, TDS, advance tax, and reporting disclosures. Here's a complete guide to what’s required.
1. Income Tax return
An Income Tax Return (ITR) is a form filed with the Income Tax Department of India to report income, expenses, taxes paid, deductions claimed, and other relevant tax details for a financial year (April to March).
- Purpose: Filing an Income Tax Return (ITR) serves several important legal, financial, and compliance-related purposes for both individuals and businesses.
| Category of Taxpayer | ITR Filing Due Date |
|---|---|
| Individuals (not liable for audit) | 31st July |
| Businesses requiring audit | 31st October |
| Companies | 31st October |
| Taxpayers requiring Transfer Pricing report (Form 3CEB) | 30th November |
| Revised or Belated Return for FY 2023–24 | 31st December |
Penalty: Rs. 5000 (Rs. 1000 if income < Rs. 5 lakh)
2. Tax Audit
A tax audit is an examination or review of accounts of any business or profession carried out by chartered accountant (CA) to ensure compliance with the provisions of the Income Tax Act, 1961.
- Purpose: Ensure accuracy of income reporting, proper maintenance of books, reduce tax evasion, and aid tax administration.
- Due Date: 31st October of the assessment year
- Penalty:
- Penalty under Section 271B: 0.5% of turnover or ₹1,50,000, whichever is lower.
- No penalty if reasonable cause is proven.
3. TDS Deposit
TDS Return is a quarterly statement filed by a person/deductor who deducts tax at source (TDS) while making certain payments such as salary, rent, professional fees, interest, etc., as per the Income Tax Act, 1961.
- Purpose: Remitting the tax deducted to the government, ensuring compliance and tax credit tracking.
- Due Dates: 7th of every next month (For March - 30th April for next F.Y.)
- Penalty: Interest @ 1.5% per month.
4. TDS Return
TDS Return is a quarterly statement filed by a person/deductor who deducts tax at source (TDS) while making certain payments such as salary, rent, professional fees, interest, etc., as per the Income Tax Act, 1961.
- Purpose: To report TDS deductions and ensure transparency and tax credit availability.
| Quarter | Period | Due Date |
|---|---|---|
| Q1 | Apr – Jun | 31st July 2024 |
| Q2 | Jul – Sep | 31st October 2024 |
| Q3 | Oct – Dec | 31st January 2025 |
| Q4 | Jan – Mar | 31st May 2025 |
Penalty: ₹200 per day (max up to TDS amount)
5. Advance Tax
Advance Tax, also known as the "pay-as-you-earn" scheme, refers to the income tax paid in installments during the financial year before the end of the year.
- Purpose: To streamline tax collection and reduce last-minute tax burdens.
| Due Date | Minimum Amount Payable |
|---|---|
| 15th June 2024 | 15% of total tax liability |
| 15th September 2024 | 45% of total tax liability (including earlier payment) |
| 15th December 2024 | 75% of total tax liability (including earlier payment) |
| 15th March 2025 | 100% of total tax liability |
- Penalty:
- Non-payment/shortfall: 1% per month
- Delay in installment payment: 1% per month
ESIC / EPFO Compliance
1. ESIC Compliance
ESIC (Employees’ State Insurance Corporation) is a social security scheme under the Employees’ State Insurance Act, 1948, designed to provide medical, cash, maternity, disability, and dependent benefits to employees and their families.
- ESIC Contribution Rates:
Contributor Rate of Contribution Employer 3.25% of gross wages Employee 0.75% of gross wages - Due Dates for ESIC:
Particular Due Date ESIC Monthly Payment 15th of next month Half-Yearly ESI Returns 11th Nov & 11th May (approximate) Employee Registration Within 10 days of joining - Penalty:
- Late payment of contribution: Interest @ 12% p.a. for each day of delay
- Non-registration: Fine up to ₹5,000 plus prosecution
2. EPFO COMPLIANCE
EPFO (Employees’ Provident Fund Organization) is governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. EPF is a social security scheme designed to ensure retirement savings and other financial benefits for employees.
- EPFO Contribution Rates:
Contributor Rate Contribution To Employer 8.33% NPS Employer 3.67% EPF Employee 12% EPF Total 24% - Due Dates for EPFO:
Particular Due Date PF Contribution Payment 15th of the next month ECR Filing (monthly PF return) On or before payment date Annual Return (Form 6A) 30th April (following FY) - Penalties:
Default Penalty / Interest Late payment of PF Interest @ 12% p.a. (simple interest) under Section 7Q Damages (penalty) for delay 5% to 100% depending on length of delay Failure to register Prosecution + penalty up to ₹5,000 False return / non-filing Fine + imprisonment
Accounting
Accounting compliance refers to adhering to the statutory requirements for maintaining books of accounts, financial statements, and related disclosures as per applicable laws such as the Companies Act, 2013, Income Tax Act, 1961, and Accounting Standards/IND AS.
Due date of accounting: Before AGM
Penalties: Fine of Rs. 50,000 to Rs. 5,00,000.
FAQs
Yes, even if the company is not operational or has no turnover, annual compliances are mandatory after incorporation.
No. Auditor is appointed for 5 years and filed using Form ADT-1 after the first appointment. However, if any change is made, filing is required.
The company’s Board of Directors, along with the help of a Chartered Accountant or Company Secretary, are responsible for ensuring timely compliance.
MGT-7 is for companies not classified as small companies.
MGT-7A is for small companies and One Person Companies (OPCs), with reduced disclosure requirements.
A company is considered Small if:
• Paid-up capital ≤ ₹4 crore, and
• Turnover ≤ ₹40 crore (as per latest financials)
Yes. Every private limited company must get its books of account audited annually by a Chartered Accountant, irrespective of turnover.
Yes. NIL returns for:
• GST (GSTR-1, GSTR-3B)
• TDS
• Income tax
• ROC filings must still be filed on time.
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