Private Limited Company: Post-Incorporation Compliances

Suppose a company is desirous of becoming a Private Limited Company. In that case, the company must arrange any seven or more persons associated with any lawful purpose. And they must subscribe their names to a memorandum of association. Also, they must comply with the requirements of the Companies Act in respect of registration. Such companies can form an Incorporated Company with limited liability. Such a Pvt Ltd registration can be one of the following:

Registered Pvt Ltd Company: Limited by Shares

A Pvt Ltd Company can have the liability of its members by the Memorandum to the amount unpaid on the shares that the members them, i.e., A PLC which limits its members by its shares.

Registered Pvt Ltd Company: Limited by Guarantee

A Pvt Ltd Company can have the liability of its members limited by the Memorandum. However, the limit is such an amount that the members can undertake by the Memorandum. Thus, they can contribute to the company’s assets if it is wound up, i.e., a guarantee limits the PLC.

Perks of a Private Limited Company

Some of the perks of being a Private Limited Company include the following:

• Easy Fund Availability: It is easy to acquire loans for a business incorporated as a private firm.
• Perpetual Succession: Once the company is registered, it can exist even after the owners have died.
• Separate Legal Structure: The company becomes a separate legal entity after registering as a private limited company. A Private Company formation leads to the company becoming a separate legal entity.
• Tax Exemptions: A registered private company also enjoys many tax benefits.

Private Limited Company: Memorandum of Association

The Memorandum of every Private Limited Company must state the following:

• Name of the company with “Private Limited” as the last words of the name
• State in which the registered office of the company is to be situated
• Objects of the company: Main objects of the company must be pursued by its Incorporation. Also, they must pursue the object incidental or ancillary to attain the main things.
• In a Memorandum, the Private Limited Company must limit its members by shares or by guarantee. Also, they must state that the PLC limits the liability of its members.

Private Limited Company: Share Capital

In the case of a Private Limited Company having a share capital, unless it is an unlimited company, the Memorandum must state the amount of share capital with which the applicant must register the company and the division of it into shares of a fixed amount. Also, no subscriber of the Memorandum must take less than one share. Furthermore, each subscriber of the Memorandum must write the number of shares he takes opposite his name.

Private Limited Company post-Incorporation

When the Ministry of Consumer Affairs issues a certificate of Incorporation to an applicant business, the business becomes a Private Limited Company registration in Delhi NCR in the eyes of the law. There are many benefits to being a Private Company. But if the registered company wants to avail of those benefits, it must comply with the MCA’s suggested regulations. Therefore, every Private Company registration must comply with such regulations periodically. These periodic submissions to the Authority are necessary to check its incorporated business entities and ensure that they all operate within the realms of law.

Private Limited Company: Business Certificate 

A registered Pvt Ltd Company, having a share capital, must obtain a business certificate before commencing any business or exercising borrowing powers. If the incorporated company fails to obtain the business certificate, the Authority will fine the company with a penalty of Rs. 50,000. In addition, each director of the Private Company will have to pay Rs. 1000 per day for each day of default.

Income Tax Returns (ITR) filings

Every Pvt Limited Company registration must file the income-tax returns on or before 30th September. If the limited company fails to do so, then the Authority will take the necessary disciplinary action against the incorporated Private Company.

Convening an Annual General Meeting     

A registered Pvt Ltd Company must hold an Annual General Meeting (AGMs) annually. Private Limited Companies must schedule their AGM within six months from closing the financial year.

 Annual Return filing (Form MGT-7)

Every Private Limited Company registration must periodically file MCA Form MGT-7 on or before 31st December. If the PLC fails to do so, the company will attract a penalty of Rs. 200 per day for delay. The MCA form MGT-7 is submitted to file the annual returns of a Pvt Ltd Company registration.

The registered Pvt Ltd Company must file the annual returns between 1st April to 31st March. Annual Returns of Private company registration must mention all the Board Meeting dates and names of the directors present in the meetings. The registered Private Company must also submit the names of directors present at the AGM. In addition, a signing document must support their attendance at the meeting. Transfer of shares, if any, to be reported requires supporting of executed transfer form with proper stamp duty payment and Board resolution for approval of transfer of shares.

Private Limited Company: Form AOC-4 filing 

Every registered private company registration must periodically file MCA Form AOC-4 on or before 30th November. If the PLC fails to do so, the company will attract a penalty of Rs. 200 per day for delay. The registered Private Company must file the following in the MCA Form AOC-4 within 30 days of holding the Annual General Meeting:

• Audited Balance Sheet
• Statement of Profit and Loss Account,
• Cash flow statement,
• Directors’ Report and
• Auditors’ Report

Statutory Auditor       

Every registered Private Limited Company in India must appoint a statutory auditor within a month of the Private Company incorporation. This is a mandatory requirement that the incorporated company must fulfil. If the company fails to appoint an auditor, it won’t be allowed to commence business. The defaulter will then have to pay a penalty of Rs. 300 per month.

E-KYC Filing for Director Identification Number  

The registered Private Company directors must file the DIN eKYC or DIR-3 eKYC form. In the form DIR-3 eKYC, the company’s director must provide

• Personal mobile number
• Email address

If the director(s) doesn’t submit the required document, the Authority will fine them a penalty of Rs. 5000.