What are the compliances for the private limited company?

Last Updated on 2 months ago by Rohit Lohade

Things to care after incorporation of a Private Limited Company:

1. Deposit Share capital amount in the bank account of company within 1 month from incorporation date
   The share capital amount must be deposited by all the shareholders in the company bank account within 1 month from date of incorporation. This mosey can be used for all the company expenses and to reimburse to directors. Form
2. Mandatory Registrations – PAN, TAN, Professional Tax and Shop act registration
   • PAN – Pan is one of the most important document of the company. It is a Identity proff of the company and is mandatory for every kind of registration.
   • TAN – This also one of the mandatory registrations. The full form id Tax Account Number. It is used required to deduct TDS and claim the credit of TDS deducted by your payers.
   • Professional Tax –This is mandatory registration for all companies and commercial establishments, The professional tax registration should be taken for all the directors and the company.
3. Registrations depending on your nature of business and turnover
   • Service Tax – If your business is providing services than service tax registration is applicable to you. Service Tax registration is mandatory only if the turnover of your company is above Rs 10 Lakhs.
   • VAT and CST – VAT and CST is applicable if you are a trader, manufacturer, importer or exporter of goods. It is a state governed law and hence the rules differ from state to state. For example VAT is applicable in Maharashtra only if the turnover exceed Rs 10 lakhs in a
   • VAT and CST is required mandatorily even if your turnover is 0 to sell on online platforms like flipkart, Amazon, Paytm etc.
   • IEC – Import export code is applicable for businesses which are engaged in import and export of goods for trading purposes.
4. Mandatory Tax Compliances (TDS and PT)
   • TDS – TDS is tax deducted and source. Whenever the company makes payments to anyone for services then the company has to deduct TDS on the same and deposit it to the government. So for payments for rent, services, interest , commissions you have to deduct TDS.
     For example if the company receives the invoice of Rs 50,000 from a website developer, then it should deduct Rs 5000 (i.e. 10% of the bill) and pay the vendor only Rs 45,000. The balance Rs 5000 has to be deposited with the government by 7^th of next month.TDS rates depends on type of payments:For professional and other services it is 10%For payments to contractors its 1% or 2%For payment of rent its 10%
   • Professional Tax Return – Professional tax return has to be filed every month or year depending on the frequency as per the state laws.
   • Income Tax return – The income tax return has to be filed by every entity even if its in not earning profits. The due date for Private Limited Company is 30^th September and for LLp is 30^th
5. Tax compliances based on your nature of business and turnover
   • If you are a trader or service provider or in any other business and your turnover exceeds Rs 20 Lakh/annum the GST returns have to be filed every month.
6. ROC Compliances
   

   Board Meetings

   • The First meeting of the Board of Directors of a Private Limited Company shall be conducted within 30 days from the date of Incorporation of company.
   • Further, minimum Four Board Meetings shall be held in a calendar year (one meeting in every 3 months).
     In case of a Private Limited Company which is classified as a “Small Company”, atleast two Board Meetings shall be held in a calendar year (one meeting in every half year)
   • Most of the startups fall within the category of “Small Company”.
   • Minimum 2 directors or 1/3rd of the total number of directors, whichever is greater, are required to be present in meeting of the Board of Directors. The discussions of the meeting need to be drafted and recorded in the form of “Minutes of the Meeting” and maintained at the Registered Office of the Company.
   • Directors should be intimated about the date and purpose of the meeting by giving a notice atleast 7 days in advance from the date of the meeting.

   Annual General Meeting

   • Every Private Limited Company is required to hold a meeting of its shareholders once in every year within a period of six months from the date of closing of the financial year.
   • The primary agenda of an AGM includes approval of financial statements, declaration of dividends, appointment or re-appointment of auditors, appointment and remuneration of directors etc.
   • The Annual General Meeting shall be held during business hours on a day which is not a public holiday and shall take place at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated.

   Annual Filings

   Private Limited Companies are required to file its Annual Accounts and Returns disclosing details of its shareholders, directors etc to the Registrar of Companies. Such compliances are required to be made once in a year.

   • As a part of Annual Filing, the following forms are to be filed with the ROC:
     • Form AOC 4 : For filing Balance Sheet by all Companies : For filing Profit & Loss Account by all Companies
     • Form 20B : For filing Annual Return by Companies having share capital
     • Form 66 : For filing Compliance Certificate by Companies
   • Form 66, 23AC, 23ACA should be filed within 30 days from the date of Annual General Meeting. Form 20B should be filed within 60 days from the date of Annual General Meeting.

   Statutory Audit

   The purpose of a statutory audit is the same as the purpose of any other audit – to determine whether an organization is providing a fair and accurate representation of its financial position by examining information such as bank balances, bookkeeping records and financial transactions.

   • Appointment of the Statutory Auditors of the Company.

   Finalize Annual Accounts with the Auditors of the Company

About Rohit Lohade

Rohit Lohade is a Chartered Accountant with 15+ years of experience. He has assisted more than 300 Gobal Companies with India Entry Strategy