Compliances for Private Limited Companies

Mandatory Compliances For Private Limited Companies in India

In India, private limited companies are the most common forms of business, and they have an excellent combination of flexibility, limited liability, and ease of doing business. Once the company has been registered, it needs to follow some specific rules and regulations that come under the mandatory compliances of Pvt. Ltd. Company. The benefits of starting a company also come with different compliance for private limited companies which are directed by the government of India.

Compliances refer to the ability to adhere to a set of rules or requests under the Companies Act, 2013. which regulates the qualifications, appointment, remuneration, and retirement of the company’s directors and other aspects too. It’s important to ensure the smooth functioning of a private limited company. In this blog, we will explore the mandatory compliances that private limited companies in India need to follow.

• Directors Appointment: A private limited company must have at least two directors and a maximum of fifteen directors. The directors must have a Director Identification Number (DIN) and within 30 days of the company’s incorporation, the company’s directors must be appointed. Also, the company name must comply with the Ministry of Corporate Affairs naming guidelines and be unique.

• Appointment of Statutory Auditors and Maintaining Statutory Registers:  First Statutory auditor must be appointed by a private limited company within 30 days of incorporation of the company for auditing the financial statements and ensuring compliance according to the taxation laws and accounting standards.
  Also, maintain statutory registers like the register of directors, members, charges, loans, and investments. Statutory registers must be updated regularly and kept at the registered office of the company.

• Filing of Annual Returns: Private limited companies must file annual returns financial statements. The annual return must include information about profit and loss statements, balance sheets, and cash flow statements with the registrar of companies (ROC) within 60 days of the annual general meeting (AGM).

• Annual General Meeting: Within 6 months from the end of the financial year, every Pvt. Ltd. company must hold an annual general meeting. It should be held at the registered office of the company.

• Filing Income Tax Returns: All private limited companies in India need to maintain annual compliances like direct taxes (income tax), indirect taxes (GST), annual returns, and income tax returns each year. The income tax return must be filed within the due date.

• Obtaining important licenses and permits: Make sure that all important licenses are obtained and renewed on a regular basis. Depending on the type of business or industry, a private limited company may need specific licenses for their business to operate legally in  India. These license permits include GST registration, professional tax registration, environmental clearances, and more.

Conclusion

Compliances for a private limited company ensure smooth functioning and avoid any legal consequences. Compliance is a crucial aspect of running a private limited company in India. various mandatory compliances need to be complied with as per the Companies Act, 2013. Meeting the regulatory requirements instils confidence in stakeholders, including investors, customers, and employees. To simplify the compliance process, companies can seek assistance from experts who can offer reliable guidance and support in meeting these mandatory compliances for private limited companies.

Follow us on @msmestory