For private limited companies located in Ranchi, Jharkhand, the preparation of annual compliance reports is an essential responsibility that safeguards their legal and regulatory standing. Adhering to the annual compliance requirements established by the Registrar of Companies (ROC) and other governmental bodies is imperative for business owners. Neglecting these regulations may result in significant consequences, such as penalties, fees, and potentially the dissolution of the business. It is advisable to consult with a compliance expert at SONASIS for assistance in filing the annual compliance for your private limited company in Ranchi, Jharkhand.
Important Compliance of private limited company
A Private Limited Company (Pvt. Ltd.) has several important compliance requirements to ensure adherence to legal and regulatory standards. Below are the key compliance obligations for a Pvt. Ltd. company in India, though similar principles may apply in other jurisdictions of Indian cities like Ranchi,Jamshedpur, Bokaro, Dhanbad etc.
1. Commencement of business
According to the stipulations outlined in the Companies Act of 2013, certain companies are required to obtain a Commencement of Business (COB) Certificate prior to initiating their business activities. This obligation pertains to companies that possess a share capital structure, and compliance with Section 10A (1)(a) of the Companies Act, along with the Companies (Incorporation) Rules, 2014, is crucial.
The penalty for a private limited company (Pvt Ltd) that fails to obtain a Commencement of Business Certificate (COB) within 180 days of incorporation is Rs 50,000.
The company will also face other consequences, such as:
- Being prohibited from starting business activities or accessing borrowing facilities.
- Directors facing a penalty of Rs 1,000 per day, up to a maximum of Rs 1,00,000.
- The company’s name being removed from the Register of Companies, resulting in a company strike-off.
The penalties are high to discourage the incorporation of shell companies.
2. Auditor appointment (adt-1)
- Appointment of Statutory Auditors: Auditors must be appointed within 30 days following the incorporation, along with any necessary renewals or modifications thereafter.
- Statutory Audit: A qualified auditor is required to conduct an annual audit of the financial statements.
The consequences of failing to appoint an auditor or to submit Form ADT-1 for a private limited company may include a monetary fine and/or imprisonment. The specific penalty amount is contingent upon the duration of the delay in filing and the nature of the infraction.
Consequences of not appointing an auditor:
• According to the Companies Act, 2013, it is mandatory for every company to designate an auditor during its inaugural Annual General Meeting (AGM).
• The appointed auditor will serve until the conclusion of the sixth AGM.
• The penalty for neglecting to appoint an auditor may reach a maximum fine of Rs 9 lakhs.
Consequences of failing to file Form ADT-1:
• The penalty associated with the non-filing of Form ADT-1 is determined by the length of the delay.
• This penalty may amount to as much as 12 times the standard fees.
• For instance, if the delay exceeds 180 days, the penalty will be 12 times the regular fees.
Consequences of breaching the Companies Act:
• An auditor found in violation of the Companies Act may face fines and/or imprisonment.
• The financial penalty can be as high as Rs 5,00,000.
• The term of imprisonment may extend up to one year.
3. ANNUAL RETURN (MGT-7)
Annual Return (Form MGT-7): Filed with RoC within 60 days of AGM.
The organization must submit the MGT 7 form within 60 days following the date of the Annual General Meeting. For the financial year 2024-25, the deadline for filing MGT-7 is set for November 29, 2025. Additionally, the annual general meeting must be held on or before September 30 of the year succeeding the conclusion of each financial year.
LATE FEE:
In the event of a delay in submitting the MGT 7 annual company return, the company must incur an additional penalty fee in addition to the standard fee. The late filing fee for MGT 7 is set at INR 100 for each day of delay.
4. FINANCIAL STATEMENT (AOC-4)
Financial Statements (Form AOC-4): Filed with RoC within 30 days of Annual General Meeting(AGM).
What happens if a company doesn’t file Form AOC-4 on time.
The company, its directors, and members will be subject to a penalty.
The company will be fined Rs. 1,000 per day, up to a maximum of Rs. 10,00,000.
The company’s directors, Chief Financial Officer, and Managing Director may be imprisoned for up to six months and fined up to Rs. 5,00,000.
5.Income Tax Return Filing (ITR)
Income Tax Return (ITR): Filed annually with the Income Tax Department.
A business tax return is an income tax return specifically designed for businesses. It serves as a detailed document that summarizes a business’s income, expenditures, and relevant tax information, formatted according to established guidelines. This process involves the annual submission of income tax returns for businesses, which includes the obligation to report Tax Deducted at Source (TDS).
PENALTY :
The company may incur a penalty for failing to file its Income Tax Return (ITR). According to Section 234F of the Income Tax Act, a fine of Rs. 10,000 will be imposed for the non-filing of tax returns. Due date keep changing every year. Furthermore, in addition to this penalty, the company may also be liable for interest on any outstanding tax amount.
6. ANNUAL GENERAL MEETING (AGM)
- Must be held annually, within six months of the end of the financial year.
- For newly incorporated companies, the first AGM should be held within nine months from the end of the first financial year.
- Shareholders and board members discuss business matters
- The board of directors presents an annual report
- Shareholders review financial statements
- Shareholders vote on organizational issues
- Shareholders elect or remove board directors
- Shareholders make decisions about the company’s future
7. DIRECTOR DIN (E-KYC)
The Director Identification Number (DIN) e-KYC refers to the annual procedure of renewing a director’s KYC (Know Your Customer) information via the DIR-3 KYC form. This form is filed with the Ministry of Corporate Affairs (MCA).
The penalty for late filing of the DIR-3 KYC form for a Director Identification Number (DIN) is a fee of ₹5,000. The DIN will be deactivated until the form is filed and the fee is paid.
The form must be filed by the due date, which is usually September 30.
SONASIS ECOM INDIA PVT. LTD. specializes in a comprehensive range of company registration services and compliance solutions tailored to meet the diverse needs of businesses. Our expert team is dedicated to guiding clients through the registration process, ensuring adherence to all regulatory requirements. For personalized assistance and to explore our offerings, please do not hesitate to reach out to us.