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FAQ on Private Limited Company Compliance

1. What is Annual Filing?

Each and every Company is needed to file an annual return with the Companies Office. This is applicable for all the Companies that are registered with the RoC(Registrar of Company) and the MCA(Ministry of Corporate Affairs) and doesn't matter whether the Company is trading or not. In case the Company does not do the Annual filing then, it may be removed from the registry.

2. What does an Annual Return contain?

It consists of certain particulars that are specified under Part I of Schedule V, and the information is filed based on the stand of the company till that day. The following are the required particulars needs to be included in the Annual Filing;

  • The Registered office
  • The register of its members
  • The record of its debenture holders
  • Its shares and debentures
  • Its members and debenture holders from the initial to the present
  • It's Debts
  • Its directors, managing directors initially appointed and that as of the present day

3. What does an Annual Return reflect/state?

Filing an Annual return reflects the position of the Company and the gradual transitions that the Company has passed through. It reflects; The capital structure of Company on master data In case there is any change in the directorship then it is also mentioned Until the date of Annual General Meeting, the transfer of securities are also mentioned.

4. Who files the Annual Return?

The Annual return can be filed by any of its directors but it shall be duly signed by both the directors of the Company and by the Manager or Company Secretary. There are certain cases when there is no Manager/ CS in a Company in such cases a signature of both the directors are compulsory.

5. What are the requirements of Annual Filings for a Private Limited Company?

If an Income Tax Return is applicable then along with Annual Return, it also needs to be filed. For a private limited company, the following documents are required to be filed with ROC annually;

  • Balance-Sheet Form 23AC to be filed
  • The Profit & Loss Account Form 23ACA
  • In case, the Company has share capital the Annual Return Form 20B to be filed
  • if the paid-up capital is between Rs. 10Lakhs to Rs. 2 crores then the Compliance Certificate Form 66 to be submitted.

6. What are the consequences if Annual Filing is not filed?

In case a Company fails to file an Annual Return then it is considered to be a default of all the officers, shareholders and the company. A penalty is charged which may extend to Rs. 500 for every day during the period in which the default continues.

7. What are the requirements for Annual Filing of a Foreign Subsidiary in India?

Since a foreign subsidiary in India is generally a Private Limited Company, it is required to file that is necessary to file Annual Corporate filing for a Private Limited Company.

8. What are the statutory compliances required for a Private Limited Company?

There are certain statutory compliances required for a private limited company and they are as follows;

  • Every Private Limited Company must operate a Board Meeting at least once in every 3 months.
  • An Annual General Meeting needs to be conducted at least once a year in addition to the Board Meetings by the Private Limited Company.

9. How to file Annual Return?

The following process needs to be kept in mind while filing an Annual Return;

  • The Company needs to maintain a proper book of accounts and the financial statement also needs to be completed.
  • An Auditor is appointed for the Company
  • Annual General Meeting is an integral part of the Company while filing Annual Return.
  • Finally, file the Annual Return with the Ministry of Corporate Affairs.

10. What is the appointment of Auditor in a Private Limited Company?

According to section 139(6), the first auditor should be appointed by the Board within 30days of Company incorporation. If the Board of the company fails to appoint the auditor, then an EGM is called within 90 days who appoint the first auditor. The first auditor is in a contract till the 1st Annual General Meeting and the remuneration is decided as per section 142(1) by the Board. The appointment of the first Auditor is governed by section 139(6) which begins with a non-obstante clause and it required consent & certificate from auditor and filing of ADT-1 with the Registrar of Company.

11. How to appoint an Auditor?

The appointment procedure is as follows:

  • Intimate the proposed auditor(s) about the appointment and also, check the eligibility of the auditor
  • This needs to get consent & certificate from auditor.
  • A recommendation is needed if it is constituted under section 177, under section 139(11)
  • Conducting a Board meeting
  • The approval of the auditor is done at the first Board Meeting
  • Update the auditor and file with ROC form ADT-1(to be attached in form GNL-2 as per MCA circular 09/2014 dated 25th April 2014) within 15 days

12. What are the ways to file an Annual Return?

The Filing can be done in Three ways:

  • The representative of the Company can themselves upload e-Forms from the MCA21 portal through the Annual Filing process, this can be done from anywhere and it is the most convenient way for e-filing.
  • The Company representative can take help of the Certified Filing Centers(CFCs) for the Annual filing of e-Forms, they need to pay the CFCs official for the same.
  • A bit lengthy process is where the company representative prepares the e-Form by following the guidelines and then copies them in a CD and drops by the nearest temporary Facilitation Offices for the acceptance of the Annual Filing e-Forms. The TFO staff helps to upload the form and generates the Challan. Thereafter the CDs are collected and uploaded into the system from where the Company can download the Challan after two working days of submission.

13. How is Tax filing done in Private Limited Company?

A Private Limited Company irrespective of its size and nature is needed to get the bunch of accounts audited and file the IT Return (Income Tax) also the RoC(Registrar of Company) Compliances by each financial year.

14. What is Income tax Return Filing?

According to the Income Tax Act, 1956 all the companies are required to file their Income Tax Return before 30th September. For a Private Limited Company, ITR-6 is the form that needs to be filed for the IT return. It is supposed to be digitally filled using the Digital Signature. The Digital signature is must as no IT Return will be filed if it is not attached to the form. This digital certificate is to be the same as the authorized signature i.e. the DSC(Digital Signature Certificate) of the Managing Directors of the company. For non-filing of the Tax Returns a penalty of upto Rs. 5000/- is charged on the company.

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