Every day hundreds of entrepreneurs come up with new ideas for the legal foundation of their prospective businesses. One basic and most important question that comes up to their mind is which structure is best suited to them. After taking a close look at the trends in start-ups, it is found that private limited company is one of the most popular business structures. A Private Limited Company structure is a privately held business that can be incorporated with a minimum 2 and maximum 200 members. There are many benefits that a private limited Company offers. Accordingly, in this article, we shall study the benefits, annual compliances and the basic event based compliances of a private Company.
Separate legal entity
Free and easy transferability of shares
Credible borrowing capacity
Capacity to sue and be sued
Less compliance and easy to maintain
A. MANDATORY ANNUAL COMPLIANCE:
1. Holding Board Meetings
All the Companies are required to hold at least 4 meetings in a financial year in such a manner that not more than 120 days shall intervene between 2 consecutive meetings of the Board.
2. Holding Annual General Meeting
Every Company shall hold at least one meeting of its shareholders to discuss and depict the annual performance of the Company. It should be held within 6 months from closing of any financial year i.e. by 30th September of every year.
3. Maintenance of statutory registers
All the Companies are advised to maintain few statutory registers in the prescribed format such as register of members, register of charges, register of directors and KMP, register of loan and guarantee, etc.
4. E-Form AOC-4
All the Companies are required to file e-Form AOC-4 within 30 days of annual general meeting i.e. by 30th October of ever year furnishing documents and details pertaining to financial statements thereof.
5. E-Form MGT-7
All the Companies are required to file e-Form MGT-7 within 60 days of annual general meeting i.e. by 30th November of every year furnishing details pertaining to the board meeting, annual general meeting, promoter and non-promoter shareholding, etc.
6. E-Form DIR-3 KYC
All the Directors of the Company are required to get their KYCs done before 30th April of every financial year.
7. E-Form DPT-3
All the Company having any outstanding loan/amount as on 31st March of every financial year has to furnish details and bifurcation of such outstanding amount irrespective of the fact whether such amount is falling under the definition of deposit or not.
8. E-Form MSME Form I
Every Company having outstanding payments dues to micro and small enterprises and in case the payment of the same is pending beyond 45 days, then the Company has to furnish details as per the following timeline:
For April to September by 31st October
For October to March by 30th April
Note: In the FY 2018-19, the Ministry of Corporate Affairs has also introduced E-Form ACTIVE/E-Form INC-22A. However, till date the same was required to be filed one time only and the annual compliance of the same is not mandated yet.