When compared to Private Limited Companies, Public Limited Companies in India are required to prepare the greatest number of annual compliances annually. There are a few rules that must be followed by listed companies in both the public and private sectors that have the highest annual and periodic compliance rates each year. Any Indian publicly traded company’s compliance filings will be discussed in detail on this blog.
The amended Companies Act of 2013 has made annual company compliance more stringent and comprehensive for limited companies, while SEBI, RBI, FEMA, and other policies and legislative executions are involved. appear to be acting more methodically and dynamically now.
As a result, in addition to tax-related compliance, the companies that are specifically listed in the index are now more concerned than ever about annual company compliance. We must make it clear that if businesses fail to comply, they face severe penalties, financial loss, and sometimes even worse—imprisonment—under these laws and legal enforcements.
The Company Compliance Guideline for Startups Any Private Limited Company A number of statutes and additional regulatory bodies require the Ltd. enterprise to adhere to a set of compliances. This also includes maintaining the accounts and statutory books, filing other returns on a regular basis, holding board meetings, and filing taxes.
Companies are required to prepare specific documents and adhere to prescribed governmental formalities in order to legally continue their business operations in India and remain compliant with the law. Penalties for noncompliance are inevitable, and in extreme cases, the company may be required to cease operations in India.
The following categories are provided for company compliances:
Table of Contents
Non-registrar compliance We are about to go into detail about their specifications in the following section.
E-Form ADT-1 (Appointment of Auditor): Specifics of Company Compliance Related to the Registrar in India Within a month, startups must appoint their first auditor. After this, shareholders are required to file E-Form ADT-1 and support this enforcement at the first AGM (Annual General Meeting).
Starting with the date of the first Annual General Meeting, the filing date cannot be found for more than 15 days.
Having an AGM: The first Annual General Meeting of the Company must be held within nine months of the end of the first fiscal year. After that, the Annual General Meeting must be held each year during the first half of the fiscal year. The MCA prohibits AGMs occurring more than 15 months apart.
Meeting of the Board: Within one month of incorporation, the startup’s first Board meeting must take place. The next meeting cannot be held before 120 days have passed.
List of required electronic forms:
The official announcement of business’s beginning (INC-20A): This electronic form must be submitted by the startup within 180 days of the precise incorporation date.
Statements of financial position (AOC-4): The Directors’ Report, balance sheet, and statements pertaining to the P&L account are included in the particulars. Within thirty days of holding an AGM, all statements must be submitted.
Directors’ appointment or removal (DIR-12): Within less than thirty days of the highlighted event, the specifications of appointment or dissolution of Company Directors, if applicable, along with their letter of consent approving their acceptance of appointment or resignation, must be filed.
The Annual Return of a Small Business (MGT-7A): In less than 60 days, this electronic form must be submitted, followed by the Annual General Meeting.
Resolution (MGT-14) with the Ministry of Corporate Affairs: For a Board Resolution to be approved, the specifics of the institutional resolutions declared at previous meetings must be filed. Within one month of the last Board meeting, this act must be completed.
Application for Director’s KYC (DIR -3 KYC): Before or on March 31st of each year, each Director is required to file KYC with the assigned DIN. After September 30 each year, this activity must be kept up.
Deposit Refunds (DPT-3): There is no exemption for startup businesses from submitting this return. Each year, this must be completed by June 30. This annual compliance check for businesses compiles information about the company’s outstanding loans and deposits.
Report of directors: According to Section 134 of the Companies Act of 2013, the Directors’ Report must include all relevant information about the business. This report is authenticated by the Board Chair. It should be noted that this individual should not have this authority granted by fewer than two Directors.
Accounting and statutory register keeping: Registers required by law, such as the Register of Directors, Members, Agreements and Contracts, Loans, Beneficial Parties, and Details of Board Meetings and Minutes; monetary statements; accounting records; ROC file, and all of these must be kept up to date and maintained on a regular basis to avoid any repercussions in the future.
Distribution of P&L accounts and other documents pertinent to them: The venture’s members must share in this distribution. Each stakeholder must be provided with authenticated financial statements, the shortened director’s report, and the auditor’s reports three weeks before the AGM begins.
Similar statutory enforcements of these startups require them to learn about regular tax filing, as well as several other returns, accounting bookkeeping in accordance with the Income Tax Law and any other relevant statutes, if any.
The type of service or product the company offers, its category, net borrowings, turnover volume, and so on. determines the company’s compliance, so it must not remain constant for all Indian startups.
Disbursement of periodic payouts (GST amounts, TCS, TDS payment, PTax, and Advance tax) through non-registrar company compliance includes:
Annual, quarterly, and monthly GST TDS Returns (filed quarterly) Evaluation of advance tax (per Section 208) Filing of IT Returns Filing of Profession Tax Returns Filing of PF Returns Filing of Tax Audit Reports (via Forms 3CB and 3CA) Filing of ESIC Returns (half-yearly) Regulatory reporting and evaluation of various Acts, such as the Factory Act, the Competition Act, and the Environment Protection Law from 1986, among others.
The extensive list of business compliances in India is likely to overwhelm prospective entrepreneurs: https://www.mca.gov.in/MinistryV2/compliancerelatedfiling.html.