The ministry of corporate affairs has released a mandatory complete MCA compliance chart for the mandatory forms coming under the MCA rules and regulations. There are multiple forms that have been released specifically for the purpose under the companies law and have been included for Compliance Management.
For every business, it is compulsory to file an annual return and audited financial reports with MCA for every fiscal year. The ROC filing is necessary irrespective of the turnover, whether it is zero or in crore.
Compliance is the ability to comply with orders, set of rules, or requests.
All companies registered in India like a private limited company, one person company, limited company, and section 8 company should ensure compliance concerning the companies Act 2013 is appropriately met. It regulates the appointment, qualification, remuneration, and retirements of the Directors and other important aspects such as conducting board meetings, shareholders meetings. A Private Ltd. company needs to maintain annual compliance like annual returns and income tax returns each year. Every day’s business operations management with difficult laws can be a task for entrepreneurs. Therefore, it’s better to take professionals’ help and understand legal requirements to ensure timely fulfilment of these compliances to waive off the fines.
Both the forms are applied to report the activities and financial date for concerned Financial Year. The due terms for annual filing of a company are based on the time of the Annual General Meeting. The perpetual failure may lead to the elimination of the company’s name from ROC’s register, including incompetence of directors. Also, it has been noticed that MCA has actively taken bold measures for dealing with any such failures. The compliances relevant to the company could be segregated into two sections Mandatory Compliances and Event-Based Compliances.
Since July 2018, companies failing to follow the statutory compliance for Private Limited will be charged ₹100 for each day of a delay till the actual date of filing. There is no ceiling limit to an additional fee. For continuous failure, penalty apart from the additional Government fee can be levied on both – company and directors, including the imprisonment.
As per Companies Act, 2013 it is mandatory to submit the signed Director Report for every financial year with MCA by filing an annual return of the company. The Director Report is considered as an attachment for the form MGT-7.
A company can opt to appoint a statutory auditor either for a period of five consecutive years or till the conclusion of next AGM. Therefore, an appointment of the statutory auditor cannot be considered as a part of annual compliance.
Audited financial statements are necessary for every company since its incorporation. The company must file the audited statements only. Also, non-audit of financial statement is not an excuse to delay the annual filing.
All Transfer or Transmission of shares of the company be notified to the MCA. Such an intimation can be made through filing MGT – 7 by the Company.
Following is the summary of the private limited company annual compliance along with due dates for Financial Year 2020-2021.
|Commencement of business ( within 180 days)||For companies registered in India after November 2019, having a share capital, it is necessary to obtain a commencement if business certificate before commencing any business or exercising the borrowing powers. The commencement of business certificate must be obtained within 180 days of incorporating a Company.In case the individual fails to obtain this certificate, there is a penalty of Rs. 50,000 for the company Rs. 1000 per day for the directors for each day of default.|
|Auditor Appointment (Within 30 days)||All registered Indian Companies must appoint a Statutory auditor within 30 days of incorporation. If the company fails to appoint an auditor, the company won’t be allowed to commence business. Also, there is a penalty of Rs. 300 per month.|
|Income Tax Return||Income tax returns need to be filed on or before 30th September 2021 for the Financial year 2020-21.|
|MCA Form AOC-4||The registered private limited companies must file MCA Form AOC-4 on or before 30th November 2021 for the FY2020-21. Failure to file AOC-4 will attract a penalty of Rs. 100 per day of default or delay.|
|MCA Form MGT-7||It is necessary to file MCA form MGT-7 on or before 31st December 2021 for FY2020-21. Failure to file MGT-7 attracts a penalty of Rs. 100 Per day of default or delay.|
|DIN eKYC||All the directors of the company must be filed for the DIN eKYC or DIR-3 eKYC. In DIR-3 eKYC, the Director must provide a unique personal mobile number and a personal email address. There’s a penalty of Rs. 5000 in case of failure to file DIN eKYC.|
|Hold Annual General Meeting||For a private limited company, it is mandatory to hold an annual general meeting once a year. Companies are required to keep their AGM within six months from closing the Financial year.|
|Director’s report||Preparation of the Directors report will be done with all the information required under Section 134.|
FIRST BOARD MEETING
First Meeting of Board, along with Directors, is expected to be held within 30 days of Incorporation of Company. Declaration of BM must be sent to each director at least seven days ere the meeting.
SUBSEQUENT BOARD MEETINGS
Minimum of 4 Board Meetings to be checked every year with not more than 120 days gap within two meetings.
Directors has to disclose details about his directorship in other companies every year. This can be done by giving a declaration in writing to the company every year.
The BOD shall designate the first Auditor of the Company within 30 days of Incorporation who shall continue the office till the completion of 1st AGM. In the matter of First Auditor, filing of ADT-1 is not necessary.
The BOD shall delegate the Auditor Auditor in first AGM of Company who shall hold the position till the conclusion of 6th AGM and shall notify the same to ROC by filing ADT-1. The capacity to submit Form ADT 1 is that of the Company and not of the Auditor Auditor within 15 days from the time of appointment.
ANNUAL GENERAL MEETING
Every Company is needed to hold an Annual General Meeting on or before 30th September every year during working hours (9 am to 6 pm). On a day that is not a public holiday and either at the certified office of the Company within the city, town/ village where the certified office is positioned. A 21 bright days’ notice is required to be given for the same.
AGM is for approval of financial statement, declaration of dividends, appointment or re-appointment of auditors, commission remuneration of directors, etc.
FILING OF FINANCIAL STATEMENTS IN (FORM AOC-4)
Each and every private Limited Company is expected to file its ‘Balance Sheet’ along with a statement of ‘Profit and Loss Account’ and ‘Director Report’ in this Form in 30 days of holding of ‘Annual General Meeting’.
FILING OF ANNUAL RETURN (FORM MGT-7)
Every company is required to file its Annual Return with Registrar of Companies within 60 days of Annual General Meeting in E-Form MGT-7. Annual Return will be for the time’ 1st April to 31st March’.
A company having turnover of INR 50 Crore or more shall be certified by a Practicing CS in Form MGT-8.
EVENT BASED COMPLIANCES
|PARTICULARS||FORM NO.||TIME LIMIT|
|CHANGE IN DIRECTORS OR KMP||DIR-12||WITHIN 30 DAYS OF SUCH CHANGE|
|INCREASE IN AUTHORIZED SHARE CAPITAL||SH-7||WITHIN 30 DAYS OF PASSING OR|
|INCREASE IN PAID UP SHARE CAPITAL (ISSUE OF SECURITY)||PAS-3||WITHIN FIFTEEN DAYS FROM THE DATE OF THE ALLOTMENT|
|CHANGE IN REGISTERED OFFICE||INC-22||WITHIN FIFTEEN DAYS FROM THE DATE OF SUCH CHANGE|
|CHANGE IN SECURED BORROWING (CREATION, MODIFICATION AND SATISFACTION OF CHARGE)||CHG-1||ALL TYPES OF CHARGES WITHIN 30 DAYS OF ITS CREATION|
|CHANGE OF NAME OF COMPANY||INC-24||WITHIN 60 DAYS FROM THE DATE OF APPLYING RESERVATION OF NAME IN INC-1|
|CONVERSION OF COMPANY||INC-27||–|
|FILING OF RESOLUTION AND AGREEMENTS||MGT-14||WITHIN 30 DAYS FROM DATE OF PASSING RESOLUTION|
|REMOVAL OF DIRECTOR BEFORE EXPIRY||ADT-2||WITHIN 30 DAYS FROM DATE OF PASSING SR|
|REPORT FOR DISQUALIFICATION OF THE DIRECTOR||DIR-9||TO BE FILED BY COMPANY WITHIN 30 DAYS OF SUCH DISQUALIFICATION|
In case if a company fails to comply with the rules and the regulations of the Companies Act, then the company and its members who default shall be punishable with a fine & Penalty for the period of which the default is continuing.
In case there is a delay in annual filing, additional fees are required to be paid. Hence, it is always better to regulate the compliances on time.