Annual Compliances of Private Limited Company

Board Meetings

At least four board meetings need to be held in a year and at least one meeting needs to be held every quarter. Presence of the directors is needed for the meeting. Quorum is 1/3rd or 2 Directors whichever is greater. The meetings need to be logged and the signed minutes need to be maintained at the Registered Office.

Annual General Meeting (AGM)

This is a shareholders meeting that needs to be held every year. Approval of financial statements, declaration of dividends, appointment of auditors, etc. is the primary agenda for this meeting. AGM needs to be held in the city where the registered office of the company is situated.

Annual Filing of Forms

There are a number of annual forms that need to be filed besides the annual financials. The information is quite detailed and talks about shareholdings, directors, financials, etc. All these forms are required to be certified by a practicing Chartered Accountant or practicing Company Secretary. Companies having paid up share capital in the range of INR 1 million to 50 million are required to file a Compliance Certificate from a practicing company secretary.

Annual return consists of information and documents that include the Balance Sheet of the Company, Profit & Loss Account, Compliance Certificate, Registered Office Address, Register of Member, Shares and Debentures details, Debt details and information about the Management of the Company. The annual return would also disclose the shareholding structure of the Company, changes in Directorship and details of transfers of securities. IndiaFilings can help file your Company's annual return in India.

Yearly Forms by Directors

The directors are required to inform the company about their directorship in other companies every year.

Maintenance of Statutory Register & Minutes Book

A number of registers are required to be maintained, such as‐ Register of Member, Register of Directors, Register of Contracts, Register of Charges, etc. The registers are required to be kept at the registered office of the company.

EVENT BASED COMPLIANCES

These are triggered based on happening of certain events.

Examples are:

• Receipt of share application money

• Allotment of sharesTransfer of shares

• Appointment/Resignation of directors

• Appointment of Managing Director/ Whole Time Director

• Executing agreement with related parties

• Change in the Bank signatories

• Change in the statutory auditors

There is paperwork that needs to be done for the above and there are various deadlines for these tasks. In case, of noncompliance or even a missed deadline there can be penalties, additional fees or a compounding of offence, etc. Hence, it is necessary that the happening of such events be tracked and compliances met with on time.

Cost of Non‐compliance:

The Companies Act, 2013 provides for penalty/fine or imprisonment either of the officer in default and/or the company. The Managing Director, Executive Director are the “officer in default”. If there is no executive director, all the directors are treated as “officer in default”. For the procedural lapses such as late filing of forms, additional filing fees are required to be paid. In case of FEMA, the penalty for noncompliance can go up to thrice the amount involved. Private Limited Companies in general have more compliance requirements than LLP’s.