The online compliances of Private Limited Company involve mandatory, tax as well as event-based compliances.
Characteristics of Private Limited Company
Mandatory statutory compliances for Private Limited Company
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Mandatory Compliances for Private Limited Company
1. Appointment of Auditor
As per the Companies Act, 2013, every Private Limited Company needs to appoint an auditor within 30 days of its incorporation. Consequently, this auditor shall hold the office till the conclusion of the first Annual General Meeting. Further, appointing an auditor requires the filing of Form ADT-1.
2. Filing of Financial Statements
Every Private Limited Company has to file its Balance Sheet, the Statement of Profit and Loss Account as well as Director Report in this form within 30 days of holding the Annual General Meeting.
3. Annual ROC returns filing
Every Private Limited Company is required to file its Annual Return within 60 days of holding of Annual General Meeting. Further, as the name suggests, Annual Return filing is for the period – 1st April to 31st March of the relevant financial year.
4. Holding of Annual General Meeting
Every Company has to to hold an Annual General Meeting on or before 30th September every year during business hours (9 am to 6 pm), on a day that is not a public holiday. Further, the holding of the meeting must be either at the registered office of the Company or within the city, town or village where the registered office is situated. However, the company has to have a 21 clear days’ notice to conduct this General Meeting.
5. Board Meeting
Above all, there must be holding of the first meeting of the Board of Directors within 30 days of the Incorporation of the Company. Additionally, every director must have a notice of the meeting at least 7 days before the meeting.
Tax related compliances for Private Limited Company
Income Tax Return Filing
A private limited company has to file annual Income Tax Return. Consequently, it can file ITR through form ITR-6 or ITR-7.
ITR-6 is to be filed by Indian Company, other than those claiming exemption under Section 11 of the Income Tax Act.
ITR-7 is to be filed for Persons including Companies who are required to furnish returns u/s 139 (4A) or Section 139 (4B) or Section 139 (4C) or Section 139 (4D)
Rate of Income Tax for Private Limited Company
1. GST Return Filing
The Private Limited Company has to obtain GST Registration if the turnover of the company exceeds Rs. 20 lakhs in a year. Thereafter, on obtaining GST Registration, it has to file GST Returns. As per the GST laws, the private limited company has to file GST returns namely – GSTR-1 and GSTR-3B; monthly or quarterly and GSTR-9. These returns contain the details of the outward and inward supplies along with the tax paid by the firm. However, if the company has opted for the composition scheme, then it needs to file GSTR-4.
2. TDS Return Filing
The TDS Return is to be filed where the company has a valid TAN and the type of return to be filed depends upon the purpose of deduction.
The various types of TDS Return are:
Firstly, TDS on Salary – Form 24Q
Secondly, Form for TDS where deductee is a non-resident, foreign company – Form 27Q
Thirdly, TDS on payment for the transfer of immovable property – Form 26QB
Lastly, any other case – Form 26Q
3. EPF Return Filing
The company is required to get EPF registration if it employs more than 10 persons. Accordingly, filing of EPF return becomes mandatory.
4. Accounting & Bookkeeping
The Private Limited Company has to maintain books of account, either if the sales/turnover/gross receipts from the business are more than Rs. 25,00,000 or the income from the business is more than Rs. 2,50,000 in any of the 3 preceding years.
5. Tax Audit
Private Limited Company is required to have a tax audit carried out if the sales, turnover or gross receipts of the business exceed Rs. 5 crore in the financial year. Apart from this, there may be a requirement to audit the company in certain other circumstances also.
The threshold limit of Rs. 5 crore is applicable w.e.f., AY 2020-2021, if the cash receipts are 5% of the gross receipts or turnover. In addition to this, the Finance Bill, 2021 has further increased this limit from ₹5 crore to ₹10 crore for taxpayers who are having digital transactions.
Event based compliances of Private Limited Company
Besides, the mandatory and tax compliances, there are various other compliances that a private limited company need to comply with on occurrence of any event in the company.
Here are specific instances of such events:
– Change in the authorized capital or the paid-up capital of the company.
– Allotment of new shares or transfer of new shares
– Giving loans to other companies
– Giving loans to directors
– Appointment of managing or whole-time Director and their payment
– Change in signatories in case of opening or closing of the bank account.
– If there is an appointment or change of the statutory auditors of the company.
Further, it is necessary to file different forms with the registrar for all such events within a specific period. In case of missing out on this, additional fees or penalties might be levied. Hence, it is necessary to meet such compliances on time.
Documents required for the compliance of Private Limited Company
The documents required are:
– Details of sales and purchases made during the relevant financial year,
– Details of expenses made during the relevant financial year,
– Bank statements,
– Credit card statements, if any,
– Details of TDS deposited and deducted,
– Balance sheet of the company,
– Profit and Loss Account, and
– Lastly, the list of shareholders
Yes, a private limited company must hire an auditor, no matter what its revenues are. In fact, there must be appointment of an auditor within 30 days of incorporation of the company. Furthermore, compliance of private limited company becomes important because of the penalties, for non-compliance can run into lakhs or rupees and can even lead to the blacklisting of directors of the company.
Late filing for non filing of Income Tax Return for a private limited company attracts a penalty which is twelve times more than the normal fees.
A Private Limited Company has to mandatorily comply with the rules and regulations and there cannot be closing of company without obeying the compliances.