April 7, 2020

Mandatory RoC Compliance for Private Limited Companies

In India, when it comes to startup, most of the business entities opt for Private Limited Company formation. The Ministry of Corporate Affairs (MCA) governs the Private Limited Companies in India as per the Companies Act 2013. As MCA suggests, you need to fulfill certain secretarial compliance or RoC compliances within a specific due date to eschew penalties.

Wondering what the ROC compliances you need to go through while forming your startup are?

Well, you don’t need to worry anymore! Here we are going to share the following details with you,

What does RoC compliance mean?
Essential RoC compliance for Private Limited Company
RoC compliance List

1. What does RoC Compliance mean?

Register of Companies, in short, RoC is the office under the Ministry of Corporate Affairs. MCA has appointed RoCs under section 609 of the Companies Act, 2013, and mostly to deal with the administration of companies. Hence, the job of RoCs is to ensure that all the companies registered as per companies Act 2013 in the country fulfill the statutory compliance requirements.

2. Mandatory RoC Compliance Filings for Private Limited Companies

Maintaining the compulsory RoC compliance is necessary to run your startup optimally. Wondering about the Mandatory RoC compliance fillings? Here is a quick guide for you,

2.1 The First Board Meeting

You need to hold the first board meeting within the first 30 days of incorporation. Alongside this, there must be a board meeting every three months and a total of four in a year. At least 1/3rd of the number of directors (minimum 2, whichever is greater) must be present in the meeting. All the directors should have the information and agenda at least 7 days before the meeting.

2.2 Annual General Meeting(AGM)

Companies need to arrange an Annual General Meeting every year. Along with that, there must be a space of 15 months between two AGM. The purpose of the AGM is to talk about financial statements, remuneration, declaration of dividend, the appointment of auditors, etc.

2.3 Form ADT-1: Appointment of Auditor

The first Statutory Auditor has to be appointed within the 30 days of incorporation at the first board meeting. Additionally, the subsequent auditors will be appointed by filing Form ADT-1 for a time span of 5 years, and that must have to be decided in the AGM. After that, at every AGM, the Shareholder needs to endorse the Auditor, but filing ADT-1 is not required.

2.4 Form MBP-1: Director Disclosure

The company directors need to file Form MBP-1 to disclose their interest in other companies. This disclosure needs to be made yearly on the first Board Meeting of the specific year.

In the case of the appointment of a new director, the qualification of the director needs to be taken as a declaration.

2.5 Form MGT-7: Filing of Form Annual Returns

Companies need to file Form MGT-7 within a deadline of 60 days from the date of conducting AGM. This is an e-filing form that companies need to file within 1st April to 31st March. You need to furnish the following information

Information regarding Board meeting or members meeting
Principal place business, registered office and details of other holdings with associate companies
Debenture holders or members along with the changes
Directors, Key managerial personnel and promoters
Remuneration of key managerial personnel and directors
Fine and penalty imposed on the company
Pattern of shareholding
Liabilities
Certification of compliance

Read all about filling of form of Annual return

2.6 Form AOC-4: Financial Statement Filing

Form AOC-4 is another e-form companies need to file within 30 days of the Annual General Meeting. It’s nothing but a financial disclosure form, and one need to enter the following details when filing Form AOC-4,

Balance sheet along with the details of particulars
Information regarding profit and loss account
Details related to Corporate Social Responsibility
Information regarding the Related Party Transactions in which the company has entered
Audit report along with the details of any other miscellaneous transaction

Read all about filling fo financial statements.

2.7 File Form DIR-8

All the directors of the company need to file this form in each financial year. The form should contain the Company disclosure of non-disqualification.

2.8 Statutory Registers along with Books of Accounts

Companies have to prepare their accounts and need to get it audited from a Chartered Accountant at the end of the FY.

Alongside, companies need to maintain the statutory registers, Minutes of AGM books, Minutes of board meeting books, debenture holder meetings, and creditors meetings.

2.9 Return of MSME – 1: Reporting for outstanding payment to MSME

If you own a business where you need to get supplies of goods or services from Micro and Small Enterprises and the payment to the Micro and Small Enterprises has not been made till the 45th days from the date of acceptance or the date of deemed receipt of the goods or services, then you will have to file a half-yearly return to the RoC through MSME-I. Such specified businesses need to offer the following details:

The amount of payment due
Specified reasons for the delay

2.10 DIR – 3 KYC of Directors

Individuals having DIN with an Active status need to file e-form DIR-3 KYC annually as per the rule 12A read with rule 11(2) and (3) of the Companies Rules, 2014. Company directors failing to file e-form DIR-3 KYC will find their DIN status Deactivated on the MCA portal once the due date to submit the form passes.

3. The End-Note

In case of non-compliance, the person responsible will have to pay penalties for the period of default. Hence, to run your company successfully, it is mandatory to maintain the register and keep updating on statutory compliances.

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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