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What are Private Limited Company Compliances?

A private limited company is defined as an establishment which is privately held. The firm must have at least 50 shareholders. The company is formed as per the provisions of Companies Act, 2013. Section 2(68) of the Act defines private companies. According to the Act, a private limited company is a company that restricts the number of shares that are transferable and prevent the public from subscribing to them. The members of the newly formed company must adhere to several private limited company compliances after company establishment.

What are the advantages of a Private Limited Company?

A company that is registered as a Private company enjoy several benefits. In this section, certain benefits of these companies will be discussed.

  • Separate Legal Entity
  • Limited Liability of the members
  • Goodwill
  • Perpetual Succession
  • Easy transferability of shares
  • No capital requirements

What is the registration process of Private Limited Company?

registration process of Private Limited Company

The registration process is the first step in the incorporation of a Private Company. Certain steps must be followed by the applicant in order to obtain license for private limited company.

Obtain Digital Signature Certificate

 A digital signature is important for various purposes. It must be acquired by the directors and the other members of the company before proceeding to other steps in the registration process.

File for Name Application

The name application form is filled in the SPICe - PART A form, with all the details with regards to the name of the company.

Draft preparation of MOA and AOA

Both the documents contain important information. Thus, both documents must be drafted and submitted as one of the crucial documents for Private Limited Company Registration.

SPICE – PART B

This form is the form of incorporation and it must contain all important details of the important members of the company such as director, shareholder, registered office and proposed objects of the company.

AGILE – pro

This is one of the forms that have been newly introduced in the process of Private Limited Company Registration. This form consists of details about GST, ESIC, EPF Registration, professional tax registration etc.

SPICE – 9

This form is a declaration by the directors and shareholders with regards to the information they provide. Through the declaration, they ensure that all the information they provide are true and accurate

Certificate of Incorporation

After all the forms and documents are submitted, the authority evaluates all of them and after they find all of it satisfactory, a certificate of incorporation is issued.

What documents are required for Private Limited Company Registration?

Before getting into the Private Limited Company compliances, understanding the guidelines and following them, the business owners of a private limited must follow certain rules with to submission of documents.

Below are certain documents that must be submitted by the applicant at the time of private company registration –

  • ID proof of the members must be submitted in the form of Pan card and Passport
  • Address proof of the Directors must be in the form of voter ID, Driving license, Passport, Latest bank statement, latest electricity bill
  • Registered office address such as latest electricity bill, NOC
  • Rent agreement, latest electricity bill, NOC
  • Utility bills of the registered address
  • Bank statement of the company
  • Scanned passport size photographs
  • Specimen signature for all the directors and shareholders for verification purposes.

What are the annual Private Limited Company compliances?

Adhering to the compliances prescribed for the company is mandatory for all the members of the firm.

annual Private Limited Company compliances

Post-Incorporation Compliances for Private Limited Company

Creation of a Bank Account

The primary reason for a private limited company to establish and register is to earn profits. When customers and investors pay, the payment takes place through banks. Thus, the company owner must create a bank account in company’s name for a private limited company.

Deposit of capital, Issue of Shares and Payment of Stamp Duty

The Company must start issuing certificates to the subscribers within 60 days after online company registration and pay stamp duty as per the stamp act within 30 days of allotment of shares.

Appointment of First Auditor within 30 days of Incorporation

According to the Section 139 of Companies Act, 2013 every company must appoint its first auditor within 30 days of incorporation by its Board of Directors.

Filling of Acknowledgement of Interest by Directors

Every director in the company must –

  • Engage in the first board meeting as a director
  • Attend the first board meeting every financial year

Filing of Annual Returns

Every Private Company must file its annual return within 60 days of the first annual general meeting in Form MGT-7. The annual return will be filed for 1 April to 31st March.

Filing of Financial Statements (Form AOC-4)

Every company registered as a private Limited Company is expected to file its 'Balance Sheet' along with a statement of 'Profit and Loss Account' and 'Director Report' in this Form. The form must be filled within 30 days of holding of 'Annual General Meeting'.

Intimation of Registered Office Address

In case the address of the registered office is not submitted by the company, they must inform the Registrar’s office and later the intimation of the address must be submitted within 30 days of registration.

Preparation of Statutory Registers

The record of all the information related to the company has to be mentioned in different registers. Some registers included in the statutory registers are registers of members, debentures and shares and lastly Memorandum of Association (MOA) and Articles of Association (AOA), all of which has to be maintained in an proper manner.

Other necessary compliances

The other compliances include GST Registration, Shop & Establishment license under the Shop Act.

What are the benefits of following Private Limited Company Compliances?

The below mentioned are certain advantages that a company enjoys if they follow all rules –

  • Reduces legal problems
  • Increases employee retention
  • Improves performance and productivity of the company
  • Increases efficiency and effectiveness
  • Attracts an builds loyal customers

What is the minimum capital required for Private Limited Registration?

There is no requirement of a minimum capital for incorporating a Private Limited Company.

Conclusion

The article mentions important details and elements that are necessary in the establishment of a Private Limited Company. Following all the rules and regulations that are described as private limited company compliance is crucial for the members of the company.

About Parul Sharma

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I am an Experienced Charted Accountant. I've recently joined Swarit Advisors. I'm actively involved in All Legal & Tax related Services provided by Swarit Advisors.

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