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Annual Compliance for Private Limited Company in Bangalore

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Renuka M
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4 min read

A Private Limited Company (PLC) is one of the most popular business structures in India due to its separate legal entity status, limited liability, and ease of raising funds. However, with the benefits come specific compliance requirements that must be adhered to annually. For companies registered in Bangalore or anywhere in India, annual compliance is mandatory under the Companies Act 2013 and other relevant laws. Non-compliance can lead to penalties, fines, or even the disqualification of directors. Below is an overview of the annual compliance requirements for a Private Limited Company in Bangalore.

1. Mandatory Annual Compliances for Private Limited Companies

a. Financial Statements and Annual Returns

  • Preparation of Financial Statements: Every Private Limited Company must prepare its financial statements, including the Balance Sheet, Profit & Loss Account, and Cash Flow Statement, at the end of each financial year (March 31st).

  • Filing of Annual Returns: The company must file its Annual Return (Form MGT-7) with the Registrar of Companies (ROC) within 60 days of the Annual General Meeting (AGM). The Annual Return contains details of the company’s shareholders, directors, and financial performance.

  • Filing of Financial Statements: The financial statements must be filed in Form AOC-4 within 30 days of the AGM.

b. Conducting Annual General Meeting (AGM)

  • Every Private Limited Company must hold an AGM within 6 months from the end of the financial year (i.e., by September 30th). The AGM is conducted to present the financial statements, declare dividends, and discuss other business matters.

c. Appointment of Auditors

  • The company must appoint a statutory auditor within 30 days of incorporation. The auditor’s appointment must be ratified at each AGM. The auditor is responsible for auditing the company’s financial statements and ensuring compliance with accounting standards.

d. Income Tax Return (ITR) Filing

  • The company must file its Income Tax Return (ITR-6) for each financial year by September 30th (if no audit is required) or October 31st (if audit is required). Companies with a turnover exceeding ₹1 crore must undergo a tax audit.

e. Director’s Report

  • The Board of Directors must prepare a Director’s Report, which includes details of the company’s operations, financial performance, dividends, and other disclosures as required under the Companies Act 2013.

f. Maintenance of Statutory Registers

  • The company must maintain statutory registers, such as the Register of Members, Register of Directors, Register of Charges, etc., at its registered office.

2. Event-Based Compliances

Apart from annual compliances, certain event-based compliances must be fulfilled as and when they occur:

  • Change in Directors: Filing of Form DIR-12 with the ROC in case of appointment or resignation of directors.

  • Change in Registered Office: Filing of Form INC-22 in case of a change in the registered office address.

  • Allotment of Shares: Filing of Form PAS-3 within 15 days of allotment of shares.

  • Creation or Modification of Charges: Filing of Form CHG-1 for the creation or modification of charges on company assets.

3. Compliance with GST (if applicable)

If the company is registered under GST, it must file monthly, quarterly, or annual GST returns (GSTR-1, GSTR-3B, and GSTR-9) based on its turnover and business activities.

4. Compliance with Labour Laws

Private Limited Companies must comply with various labour laws, including:

  • Employees’ Provident Fund (EPF): Filing of monthly EPF returns.

  • Employees’ State Insurance (ESI): Filing of monthly ESI returns (if applicable).

  • Professional Tax: Deduction and remittance of professional tax to the state government.

5. Penalties for Non-Compliance

Failure to comply with the annual compliance requirements can result in:

  • Late filing fees for delayed submission of forms.

  • Penalties under the Companies Act, 2013.

  • Disqualification of directors.

  • Striking off of the company’s name from the ROC.

6. Role of Professionals

Given the complexity of compliance requirements, most Private Limited Companies in Bangalore engage professionals such as Chartered Accountants (CAs), Company Secretaries (CSs), and legal advisors to ensure timely and accurate compliance.

Conclusion

Annual compliance is a critical aspect of running a Private Limited Company in Bangalore. It ensures transparency, accountability, and good corporate governance. By adhering to the compliance requirements, companies can avoid legal hassles and focus on their core business activities. It is advisable to maintain a compliance calendar and seek professional assistance to stay updated with the latest regulatory changes.

Annual Compliance for Private Limited Company in Bangalore