What are The Compliances a Private Limited Company Must Adhere To?
Most businesspeople prefer to incorporate a Private Limited Company as compared to other business entities. The main reason being that a private limited company has many advantages in terms of limited liability, being a separate entity and more chances of getting funds. On the contrary, a private limited company has to meet a long list of compliances, which can be a daunting task. The compliance requirements have been changed in the Companies Act, 2013 as compared to the Companies Act, 1956.
Following are the requirements a Private Limited Company has to comply with as per the Companies Act, 2013.
- Appointing an Auditor for a period of five years
- An annual audit of accounts and filing the audit reports & financial statements with the registrar
- Filing annual returns after 2 months of the Annual General Meeting being held
- Filing profit and loss statement, balance sheet & Director’s report 1 month after the Annual General Meeting is held
- Holding an annual general meeting, 6 months from the end of the financial year
- Preparing the Director’s report
- There should be a minimum of four board meetings and the gap between two meetings should not be more than 4 months
- Income tax return filing
- If the company has a share capital of 5 crores then it’s mandatory they appoint a Company Secretary
Where a private limited company has more credibility, it has to cater to more compliances than other business structures. It is advisable to seek professional help and meet the mandatory compliances. Additionally, in the case of non-compliance the defaulting officer will be penalised. If you want to open your business with less stress laid on the fundraising then it is advisable to open a Limited Liability Partnership with fewer compliance costs. If you have any queries related to compliances for private limited company, we at Startup Choice are here to help and provide instant solutions.
It is of utmost importance to cater to statutory compliances in order to avoid getting blacklisted. If you have any compliance related queries, we at Startup Choice are here to help and provide instant solutions.