Annual Compliances for Private Limited Company – Everything You Need to Know

A Private Limited Company has its own name and separate from its directors. So, in order for a business to stay active, it has to file annual compliances for a private limited company with the Ministry of Corporate Affairs every year (MCA). Since the Companies Act was passed in 1956, the scope of private limited companies has changed a lot.

As a way to stop private limited companies from doing too much, the Ministry of Corporate Affairs and the Registrar of Companies send out a lot of rules and regulations that private limited companies have to follow. These terms might be hard for someone who isn’t an expert to understand. Thus, it is best to get help from a professional right away after you register your private limited company so that they can help you with your annual compliances.

Article Navigation:

  1. Private Limited Company Compliances
  2. What is the meaning of the Annual Compliances for Private Limited Company?
  3. The Actual Benefits of Annual Compliances for Private Limited Company
  4. Documents Required for Annual Compliances for Private Limited Company
  5. Event Based Annual Compliances for Private Limited Company
  6. Conclusion

Private Limited Company Compliances

It says in Section 149 (1) of the Companies Act, 2013, that the minimum number of directors needed to start a private limited company is two. The maximum number is fifteen. In addition, there is a limit of 200 people who can join. As long as they put money into a private limited company, all of their liability is limited to the amount of money they put into the company.

At the same time, a public limited company must have at least three directors when it is set up. A public limited company registration has more advantages than a private limited company registration in terms of perpetual existence, transferability, and borrowing power, but it costs more to set up than a private limited company. Companies that aren’t public must still report their annual compliance to the Registrar of Companies, even if they make nothing.

What is the meaning of the Annual Compliances for Private Limited Company?

Most of the things that a private limited company does are regulated by the Companies Act, 2013. These include the appointment, qualification, remuneration, and retirement of the company’s directors, as well as other things like how the board meetings and shareholder meetings are run and how the directors are paid. It’s always better to get help from a lawyer to understand the law and make sure that all of the required steps are done on time so that you don’t have to pay any penalties. After you register your private limited company, you can outsource the annual compliances for the company. This lets you focus on the important parts of your business.

The dates for a private limited company to file its annual report are based on the date of its Annual General Meeting. This can happen if a business keeps not meeting the annual requirements for a private limited company. The MCA may remove the company’s name from the register and the directors may be permanently banned from being company directors.

The Actual Benefits of Annual Compliances for Private Limited Company

  1. Greater Credibility:

Private limited companies must file their annual compliances by a certain date. This date is shown on the MCA portal and can be seen by everyone. As a result, the consistency with which you file compliances increases your business’s credibility, which attracts customers, helps you get government tenders, and gets you loans.

  1. Attracts investors:

In terms of investors, the most important things to look at are financial records and compliance. Investors look at how often you file your annual returns on the MCA portal before they invest in your business. So, if you want to get investors, you need to make sure your private limited company files its annual compliances on a regular basis.

  1. Maintain active status of your business:

Filing annual compliances for a private limited company is very important to avoid paying extra for accounting services. Failure to file may also make your business look like it’s going to default and charge you a lot of money if you don’t. Another thing that will happen to the company is that it will be labelled “inactive” and removed from the Registrar of Companies. The people who run these companies can’t do any more work in the future. For every day that goes by since July 2018, an extra fee of Rs 100 will be charged.

Documents that a Private Limited Company needs to meet its Annual Compliances.

The documents requirement for Annual Compliances for Private Limited Company are as below:

  • Certificate of Incorporation
  • PAN Card of Directors
  • It has a Memorandum of Association (MOA) and a set of Articles of Association (Articles of Association).
  • Audited Financial Statements
  • DSC (Digital Signature Certificate) of Directors
  • Audit Report and Board Report
  • Annual Compliances for Private Limited Company
  1. Appointment of First Auditor:

Within 30 days of the company being formed, the Board of Directors must hire an auditor. A private limited company that doesn’t have an auditor is going to have to pay a fine of Rs 300 every month. In addition, the company will not be able to start business. He or she must stay in the office until the end of the first AGM.

  1. Subsequent Auditor:

A second auditor is hired to make sure that a company is doing the right thing when it comes to its finances. First, he/she is elected at the first AGM. He/she stays in the same place until the sixth AGM. As required by the Companies Act of 2013, Form ADT-1 is used to appoint a new auditor, and this is how it works.

  1. Board Meetings:

One month or 30 days after the company was formed, the first board meeting has to be held. Four board meetings must be held each year. One should also keep in mind that there can’t be more than 120 days between two meetings. At least seven days before the date of the meeting, each director should be told about the meeting.

  1. Annual General Meeting:

One of the most important things for a private limited company to do each year is to hold an Annual General Meeting, also known as an AGM. People who own the company must be told the truth about its finances at annual meetings, which are called “AGMs.” Every financial year, the company must hold a meeting of the board of directors on or before September 30th. During work hours. During the AGM, it should not be held on public holidays or after work hours. It must be held at the registered office at least 21 days after the notice was sent out.

  1. Filing of Annual Returns:

Everyone who owns a private limited company has to file its annual report within 60 days of having its Annual General Meeting. Fill out MCA Form MGT-7. Every day that you don’t file your annual report will cost you a penalty of Rs 200.

  1. Filing of Financial Statements:

If your company has an annual meeting, you need to file your financial statements, such as your Profit and Loss Account and Balance Sheet with Form AOC-4, within 30 days of the meeting. You also need to file your Director’s Report with Form AOC-4. If you don’t fill out Form AOC-4, you’ll be fined Rs 200 every day you don’t.

  1. Director Disclosure:

All private limited companies have to fill out Form MBP-1 every year at the first Board Meeting of the year to show that they own shares in other companies.

  1. DIR-3 KYC of Directors:

Directors who have a DIN (Director Identification Number) and are in good standing must file DIR-3 KYC every year, according to the Companies Rules, 2014. If you don’t file DIR-3 KYC, your DIN will be inactive on the MCA portal. Please note that if DIR-3 isn’t working, you can’t file a Form of Annual Compliance for a private company.

  1. Form DIR-8:

When a new director of a private limited company is hired, he or she must fill out a form called DIR-8 to make sure that he or she is not disqualified or barred from being a Director of a company.

  1. Commencement of Business Certificate:

Every company must get a certificate of start-up business within 180 days of setting up their business. There will be a fine of Rs 50,000 for the company and Rs 10,000 for each day that the directors don’t get this certificate.

Event-based Annual Compliances for Private Limited Company

Annual compliances for private limited companies aren’t the only things that need to be done for them. There are also compliances that need to be done when an event happens. It’s time to talk about a few different things that happened.

  • A change in the amount of money that the private limited company can have or the amount that it has already paid in (Form SH-7 and PAS-3 respectively)
  • Transfer of new shares or allotment of new shares is also called this.
  • Making loans to other businesses
  • Offer loans to the directors of the company. • Hire a managing or full-time Director, and pay them for their work (to be filed with the ROC)
  • As soon as a bank account is opened or shut down, a new person is signed on to the account.
  • There may be a change in the statutory auditors of a company.


To sum up, annual compliance can either make or break your business. A good way to build trust in your business is to have a good reputation. The cost of not following rules always ends up being more than the cost of following rules. So, you should talk to a professional who can help you at every step of your business, as well as help you meet all of your company’s compliance needs while keeping you both on the same page. Taxzona is a full-service consulting company that can help you set up a business in Mumbai, as well as help you with annual compliance, ROC filing, and MCA filing.