Annual Compliance for Private Limited Company in Chennai

A Private Limited Company (Pvt Ltd) is one of the most popular business structures in India due to its separate legal entity, limited liability, and ease of raising funds. However, with the benefits come specific compliance requirements that must be adhered to annually. In Chennai, like in the rest of India, Pvt Ltd is governed by the Companies Act 2013 and must fulfil various statutory obligations to maintain its legal standing. This article outlines the key annual compliance requirements for a Pvt Ltd in Chennai.

1. Mandatory Annual Filings with the Registrar of Companies (ROC)

Private Limited Companies are required to file the following forms with the ROC annually:

Annual Return (Form MGT-7): Every company must file an annual return within 60 days from the date of the Annual General Meeting (AGM). The return includes details such as shareholding patterns, directors, and key managerial personnel.
Financial Statements (Form AOC-4): The company must file its audited financial statements, including the Balance Sheet, Profit & Loss Account, and Director’s Report, within 30 days of the AGM.
Director’s Report:
The Director’s Report must be prepared and attached to the financial statements. It provides an overview of the company’s performance, operations, and future outlook.

2. Conducting Annual General Meeting (AGM)

Every Private Limited Company is required to hold an AGM within six months from the end of the financial year (i.e., by September 30th for companies following the April-March financial year). During the AGM, the following matters are typically discussed:

Approval of financial statements.
Declaration of dividends (if any).
Appointment or reappointment of auditors.
Any other business as per the company’s requirements.

3. Appointment of Auditors

Every Private Limited Company must appoint an auditor within 30 days of incorporation. The auditor is responsible for auditing the company’s financial statements and ensuring compliance with accounting standards. The first auditor is appointed for a term of five years, subject to ratification at each AGM.

4. Income Tax Return Filing

Private Limited Companies must file their Income Tax Returns (ITR) annually. The due date for filing ITR is usually September 30th (for companies not requiring audit) and October 31st (for companies requiring audit). Key points include:

Filing ITR-6, which is specifically for companies.
Ensuring accurate reporting of income, expenses, and taxes paid.
Compliance with Transfer Pricing regulations (if applicable).

5. Maintenance of Statutory Registers and Records

Private Limited Companies are required to maintain various statutory registers and records, including:

Register of Members.
Register of Directors and Key Managerial Personnel.
Register of Charges.
Minutes of Board Meetings and AGMs.

These records must be kept at the company’s registered office in Chennai and made available for inspection by authorities when required.

6. Compliance with Goods and Services Tax (GST)

If the company is registered under GST, it must file monthly, quarterly, or annual GST returns, depending on turnover and other factors. Key GST compliance requirements include:

Filing GSTR-1 (outward supplies) and GSTR-3B (summary return).
Filing an annual return (GSTR-9) and reconciliation statement (GSTR-9C) if turnover exceeds Rs. 5 crores.

7. Deductions and Payments under TDS/TCS

If the company is liable to deduct Tax Deducted at Source (TDS) or collect Tax Collected at Source (TCS), it must:

File quarterly TDS/TCS returns.
Issue TDS/TCS certificates to deductees/collectees.
Ensure timely payment of TDS/TCS to the government.

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

Employees’ Provident Fund (EPF): Filing monthly returns and ensuring timely contributions.
Employees’ State Insurance (ESI): Filing monthly returns and contributions (if applicable).
Professional Tax: Deducting and remitting professional tax for employees in Tamil Nadu.

9. Secretarial Audit (if applicable)

Companies with a paid-up share capital of Rs. Fifty crores or more or a turnover of Rs. 250 crores or more must undergo a secretarial audit and file Form MR-3 with the ROC.

Suppose the company meets the specified criteria (net worth of Rs. 500 crores, turnover of Rs. 1,000 crores, or net profit of Rs. 5 crores). In that case, it must constitute a CSR committee and spend at least 2% of its average net profit on CSR activities as per Schedule VII of the Companies Act, 2013.

Penalties for Non-Compliance

Failure to comply with annual compliance requirements can result in penalties, fines, and even disqualification of directors. Depending on the delay, late filing fees for ROC forms can range from Rs. 100 to Rs. 1,000 per day.

Conclusion

Annual compliance for a Private Limited Company in Chennai is a critical aspect of corporate governance. By adhering to the statutory requirements under the Companies Act 2013 and other applicable laws, companies can ensure smooth operations, avoid penalties, and maintain their reputations. To ensure timely and accurate compliance, it is advisable to engage professional services, such as chartered accountants, company secretaries, and legal advisors.