Key MCA compliance requirements for private limited companies
Every company registered in India must abide by the provisions of the Companies Act, 2013. The Companies Act refers to an act of Parliament which regulates the functioning of organizations. It directs the legal limits within which firms can operate their businesses. A private limited company is one of the most sought forms of starting a business in India. But, you will have to follow various compliances after the incorporation of your business. Every private limited company must adhere to a few MCA compliances. Some of these key MCA compliance requirements are as follows.
The tenure of an auditor is five years. The company must appoint the first auditor within a month of the incorporation of the company.
Every private limited company must prepare its accounts. The organization must get these accounts audited by a chartered accountant at the end of the financial year. The auditor must provide an Audit Report and Audited Financial Statements to file it with the registrar.
Annual RoC Filings
Private limited companies must file their annual accounts and returns. These returns should disclose the details of the shareholders and directors of the company to the registrar. The firms must make these compliances once in a year.
Companies should fill the following forms with the RoC.
- Form MGT-7 (Annual Return): Private limited companies should file their annual return within 60 days of holding of Annual General Meeting. The annual return will be valid from 1st April to 31st March.
- Form AOC-4 (Financial Statements): Private Limited Companies must file their balance sheet along with the statement of profit and loss account. It should also include the director’s report in this form within thirty days of holding of the annual general meeting.
Annual General Meeting
Private limited companies must conduct a shareholder meeting at least once every year. This meeting should take place within six months of the end of the financial year, during the business hours of a working day. Companies can conduct this meeting either at the registered office of the company or at some other location in the town where the organization has its registered office.
Every private limited company must conduct the first meeting of its board of directors within thirty days of the incorporation of the company. These meetings must take place at least four times in a year, i.e., one session in a quarter. Small companies must hold at least two such meetings, i.e., one sitting in six months.
At least two directors, or one-third of the total number of directors, whichever is greater, should preside over these meetings. The company should draft and record the discussions in these meetings as “Minutes of the meeting” and maintain them at the company’s registered office. The organization should also give a notice a week before the meeting to intimate the director about its date and purpose.
The directors must disclose about their directorship in other companies every year. The director must give a declaration in writing notifying the company about it every year.
Maintenance of Records and Statutory Registers
Every private limited company must maintain all its records and statutory registers, such as the register of shares, members, directors, etc. Besides, the company must also keep the records of all the board meetings and annual general meetings. The firm is also responsible for maintaining the account books related to a period of at least eight financial years.