Private Limited Companies Compliance Overview

Compliance overview for Private Limited Companies

Private Limited Company:

Private Limited Company is defined under Section 2(68) of the Companies Act, 2013 . It means a company which by its articles :

(i) restricts the right to transfer its shares;

(ii) except in case of One Person Company, limits the number of its members to two hundred:

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:

Provided further that—

(A) persons who are in the employment of the company; and

(B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased,

- shall not be included in the number of members; and

(iii) prohibits any invitation to the public to subscribe for any securities of the company;

Kindly note that: Minimum Paid up Share Capital criteria is omitted.

An overview of Key Compliance requirements:

1. Meeting of Board of Directors:

First Meeting of Board of Directors is required to be held within 30 days of Incorporation of Company and thereafter 4 meetings are required to be held in every financial year.

Gap between two Board  meetings  : should not be more than 120 days.

Notice of Board meeting must be send before 7 days of meeting to every director by way of physical or through e-mail.

Kindly Note that: In First Board meeting, Company has to approve pre-incorporation expenses, authorize  directors for issuing share certificate, signing the ROC Forms, and bank account opening, appoint first auditor of the company etc.

2. Issuing of Share Certificate

The Company is required to issue Share Certificates to the subscribers of memorandum within 60 days of Incorporation of Company.

3. Filling of Disclosure of interest by Directors:

a)  MBP-1 [Pursuant to section 184 (1) and rule 9(1) of Companies (Meetings of Board and its Powers) Rules, 2014

Director of every company are required to give disclosures about their interest in any other business entity in first Board Meeting in which they participate as a Director and thereafter in First Board Meeting of every financial year in FORM MBP-1 to the Company.

b) DIR-8 Pursuant to Section 164(2) and rule 14(1) of Companies (Appointment and Qualification of

Directors) Rules, 2014Every director shall inform to the company concerned about his disqualification under section 164 (2), if any, in Form DIR-8 before he is appointed or re-appointed.

4. Annual General Meeting:

A company may hold its first annual general meeting, within a period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year.

Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, by a period not exceeding three months.

Meeting must be held not later than 6 months from close of financial year.

5. Minutes of proceedings of Meeting of Board of Directors, General Meeting:

It is mandatory for every company to cause minutes of the proceedings of every meeting of Board of Directors, General meeting within 30 days of conclusion of meeting concerned. Minutes shall be preserved permanently and shall act as evidentially value in case of any dispute.

(Follow instructions as mentioned under revised SS-1 and SS-2)

6. Compliance with respect to Secretarial Standards:

a) SS-1 (SECRETARIAL STANDARD ON MEETINGS OF THE BOARD OF DIRECTORS)

b) SS-2 (SECRETARIAL STANDARD ON GENERAL MEETINGS)

7. Approval and Signing of Financial Statements:

The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board by the chairperson of the company where he is authorised by the Board or by two directors out of which one shall be managing director, if any, and the Chief Executive Officer, the Chief Financial Officer and the company secretary of the company, wherever they are appointed, or in the case of One Person Company, only by one director, for submission to the auditor for his report thereon.

8. Report by Board of Directors:

Every Company has to prepare a board report which shall include:

Details as mentioned under Section 134(3) of the Companies Act, 2013.

Briefly includes: state of the company, operations during the year, net profit, dividend declaration and its compliance with a set of financial, accounting and corporate social responsibility standards contains etc.

9. Event Based Compliances

·         Receipt of share application money

·         Allotment of shares

·         Transfer of shares

·         Appointment/Resignation of directors

·         Appointment of Managing Director/ Whole Time Director

·         Executing agreement with related parties

·         Change in the Bank signatories

·         Change in the statutory auditors

Overview of MCA – ROC Compliances:

Applicable Laws/Acts	Due Dates	Compliance Particulars	Forms / Filing mode
Companies Act, 2013	Within 180 Days From The Date Of Incorporation Of The Company	As per Section 10 A (Commencement of Business) of the Companies Act, 2013, inserted vide the Companies (Amendment) Ordinance, 2018 w.e.f. 2nd November, 2018, a Company Incorporated after the ordinance and having share capital shall not commence its business or exercise any borrowing powers unless a declaration is filed by the Director within 180 days from the date of Incorporation of the Company with the ROC. http://www.mca.gov.in/Ministry/pdf/CompaniesFourthAmendmentRules_19122018.pdf	MCA E- Form INC 20A
Companies Act, 2013	within 90 days from the date of notification Dt. 08.02.2019 ( i.e.  On or before 8th of May, 2019)	A person having Significant beneficial owner shall file a declaration to the reporting company http://www.mca.gov.in/Ministry/pdf/CompaniesOwnersAmendmentRules_08020219.pdf i.e. within 90 days of the commencement of the Companies (Significant Beneficial Owners) Amendment Rules, 2019 i.e. 08.02.2019	Form BEN-1 Draft Format available at https://enlightengovernance.blogspot.com/2019/07/draft-format-for-ben-1-sbo-rules-2018.html
Companies Act, 2013	31.07.2019 Within 30 Days of 01.07.2019	Filing of form BEN-2 under the Companies (Significant Beneficial Owners) Rules, 2018. (Within 30 days from deployment of the E –form (earlier the date of receipt of declaration in BEN-1 ) http://www.mca.gov.in/Ministry/pdf/CompaniesOwnersAmendmentRules_08020219.pdf No additional fee shall be levied if the same is filed within 30 days from the date of deployment of the said e-form.	Form BEN – 2 (e-form deployed by Ministry (ROC)) on 01.07.2019
Companies Act, 2013	On or before 15.06.2019 (form can be filed after due date with a fee of Rs. 10000 (one time fee)	Filing of the particulars of the Company & its registered office. (by every company incorporated on or before the 31.12.2017.) Due date extended- Link : http://www.mca.gov.in/Ministry/pdf/CompaniesRegistrationOfficesFeesRule_25042019.pdf	Active Form INC -22A
Companies Act, 2013	30.09.2019	*DIN KYC through DIR 3 KYC Form is an Annual Exercise. http://www.mca.gov.in/Ministry/pdf/DIR3KYCcompleteMessage_13042019.pdf Penalty after due date is Rs. 5000/-(one time)	E-Form DIR – 3 KYC (Web Based)
Companies   Act, 2013		All Specified Companies (i.e. Companies who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed 45 days from the date of acceptance or the date of deemed acceptance of the goods or services as per section 9 of the Micro, Small and Medium Enterprises Development Act, 2006) to file details of all outstanding dues to Micro or small enterprises suppliers existing on 22.01.2019 within thirty days. Link of the MCA notification : http://www.mca.gov.in/Ministry/pdf/MSMESpecifiedCompanies_22012019.pdf	Form MSME -1
Companies Act, 2013	Within 30 days	Transaction during the year, which are deposits as well as and which are not deposits (exempted deposits) Auditor's Certificate is mandatory. This is to be filled every year. Can be filed after comply with the penal provisions.	E –Form DPT – 3

   v ROC Annual Filings:

Sl. No.	Particulars	Due Date	E- Form
1	Appointment of Auditor	With in 15 days from the conclusion of AGM	ADT-1
2	Filing of financial statement and other documents with the ROC	With in 30 days from the conclusion of the AGM, other than OPC (In case of OPC within 180 days from the close of the financial year)	AOC-4
3	Filing of annual return by a company.	With in 60 days from the conclusion of AGM	MGT-7
4	Filing of Cost Audit Report with the Central Government	With in 30 days from the receipt of Cost Audit Report	CRA-4
5	Filing of Resolutions and agreements to the Registrar	With in 30 days from the date of Board Meeting.	MGT-14