Private limited company compliance checklist

Stay compliant and avoid penalties! Here’s a complete checklist of legal and regulatory requirements for Private Limited Companies in India for [2025]

Starting and running a private limited company in India is an exciting journey, but it comes with a set of responsibilities. As business owners, we need to ensure that our company complies with the legal and regulatory framework laid out by the government. Non-compliance can lead to penalties, legal issues, or even the risk of shutting down operations. That’s why having a clear and comprehensive compliance checklist is essential for every private limited company. In this article, we’ll walk you through the key compliances you need to follow, breaking them down into simple, easy-to-understand steps. Whether you’re a new entrepreneur or managing an established business, this guide will help you stay on the right track.

Why Compliance Matters for Private Limited Companies

Before diving into the checklist, let’s take a moment to understand why compliance is so important. When we register a private limited company, we’re creating a separate legal entity under the Companies Act, 2013. This means the company has its own rights and obligations, distinct from its owners or directors. To maintain this status and enjoy the benefits like limited liability, we must adhere to the rules set by various authorities, including the Ministry of Corporate Affairs (MCA), the Income Tax Department, and others.

Compliance isn’t just about avoiding penalties; it’s about building trust with stakeholders, ensuring smooth operations, and protecting the company’s reputation. From filing annual returns to maintaining proper records, every step plays a role in keeping the business legally sound. So, let’s explore the essential compliances that we, as private limited company owners, need to prioritize.

Key Compliances for Private Limited Companies in India

Here’s a detailed checklist of compliances that every private limited company in India must follow. We’ve categorized them into different areas for better clarity, so you can easily understand and implement them.

1. Statutory Compliances Under the Companies Act, 2013

The Companies Act, 2013, is the primary law governing private limited companies in India. It lays down rules for incorporation, management, and operations. Here are the key requirements we need to fulfill:

• Annual General Meeting (AGM): We must hold an AGM within six months from the end of the financial year (by September 30th). During this meeting, financial statements are approved, and important decisions are made.
• Board Meetings: A minimum of four board meetings must be conducted each year, with a gap of not more than 120 days between two meetings. For newly incorporated companies, the first board meeting should be held within 30 days of incorporation.
• Filing Annual Returns: Every year, we need to file Form MGT-7 (annual return) and Form AOC-4 (financial statements) with the Registrar of Companies (ROC) within 60 and 30 days of the AGM, respectively.
• Appointment of Auditor: An auditor must be appointed within 30 days of incorporation, and their term lasts for five years. We also need to file ADT-1 with the ROC to notify about the appointment.
• Maintenance of Statutory Registers: We’re required to maintain records like the register of members, directors, and share transfers at the registered office.
• Director’s Report: A detailed report on the company’s performance, prepared by the board of directors, must be presented during the AGM and filed with the ROC.

For more detailed guidelines on these requirements, you can visit the official website of the Ministry of Corporate Affairs.

2. Tax Compliances

Taxation is a critical area where we need to be extra cautious. Missing deadlines or failing to file returns can attract heavy penalties. Let’s look at the major tax-related compliances:

• Income Tax Returns (ITR): We must file the company’s income tax return by September 30th of the assessment year. This includes details of income, expenses, and taxes paid.
• Tax Deducted at Source (TDS): If we deduct TDS on payments like salaries or professional fees, it must be deposited monthly, and quarterly returns need to be filed.
• Goods and Services Tax (GST): If our company’s turnover exceeds the threshold limit (currently Rs. 20 lakhs for services and Rs. 40 lakhs for goods in most states), we must register for GST. Monthly or quarterly returns, depending on turnover, need to be filed on time.
• Advance Tax: If the company’s tax liability exceeds Rs. 10,000 in a financial year, advance tax must be paid in four installments during the year.

To understand more about tax obligations and deadlines, the Income Tax Department’s official portal is a great resource.

3. Labor Law Compliances

If our private limited company employs staff, we must comply with labor laws to ensure fair treatment and avoid legal disputes. Some key laws include:

• Employees’ Provident Fund (EPF): If we have 20 or more employees, registration under the EPF Act is mandatory. Monthly contributions must be deposited by the 15th of the following month.
• Employees’ State Insurance (ESI): For companies with 10 or more employees (in certain states), ESI registration is required to provide medical and other benefits to workers.
• Professional Tax: If applicable in our state, we need to deduct professional tax from employees’ salaries and deposit it with the state government.
• Minimum Wages Act: We must ensure that employees are paid at least the minimum wage as prescribed by the state or central government.

4. Financial and Accounting Compliances

Maintaining accurate financial records is not just a legal requirement but also helps us make informed business decisions. Here’s what we need to do:

• Books of Accounts: We must maintain proper books of accounts, including profit and loss statements, balance sheets, and cash flow statements, as per the accounting standards.
• Audit Requirements: If our company’s turnover exceeds Rs. 1 crore or net worth exceeds Rs. 25 lakhs, a statutory audit is mandatory.
• Internal Audit: For larger companies with significant turnover or borrowings, an internal audit may also be required to ensure transparency.

5. Other Regulatory Compliances

Depending on the nature of our business, additional compliances may apply. For instance:

• Shops and Establishments Act: If we operate from a commercial space, registration under this act is necessary in most states.
• Industry-Specific Licenses: Certain sectors like manufacturing, food, or pharmaceuticals require specific permits or licenses.
• Foreign Direct Investment (FDI) Compliance: If our company has foreign investment, we must report it to the Reserve Bank of India (RBI) and comply with FDI norms.

For businesses dealing with foreign transactions or investments, the Reserve Bank of India’s website provides valuable information on compliance requirements.

6. Event-Based Compliances

Apart from regular compliances, certain events in the company’s lifecycle trigger additional filings or actions. These include:

• Change in Directors or Shareholding: Any change in the board of directors or share structure must be reported to the ROC within 30 days.
• Increase in Authorized Capital: If we decide to increase the company’s authorized capital, necessary forms and fees must be submitted to the ROC.
• Change of Registered Office: Shifting the registered office requires filing Form INC-22 with the ROC within 15 days of the change.

Tips for Staying Compliant

Keeping up with all these compliances might seem overwhelming, but with a little planning, we can manage them effectively. Here are some practical tips to stay on top of things:

• Create a Compliance Calendar: Mark important deadlines for filings, meetings, and payments to avoid last-minute rushes.
• Hire Professionals: Engaging a chartered accountant or company secretary can help us navigate complex regulations and ensure accuracy.
• Use Technology: There are several software tools available that can automate reminders and filings, making the process smoother.
• Stay Updated: Laws and regulations change frequently, so we should regularly check for updates on government portals or consult experts.

If you’re just starting out and want to understand the foundation of setting up a company, take a moment to learn more about private limited company registration process. It’s the first step to building a legally compliant business structure.

Penalties for Non-Compliance

Ignoring compliance requirements can have serious consequences. For instance, late filing of annual returns can attract a penalty of Rs. 100 per day. Non-holding of board meetings or AGMs can lead to fines for directors. Moreover, failure to deposit taxes or file GST returns on time can result in interest charges and legal action. As responsible business owners, we must prioritize compliance to avoid such setbacks and focus on growing our company.

Why Regular Compliance Audits Are a Good Idea

Conducting periodic compliance audits is a proactive way to ensure that we’re not missing anything. An audit helps identify gaps in filings, records, or processes before they become major issues. It also reassures investors and stakeholders that our company is well-managed and transparent. We can either conduct internal audits or hire external professionals to review our compliance status annually.

Building a Culture of Compliance

Compliance isn’t just a checklist to tick off; it’s a mindset. As business owners, we should foster a culture where everyone in the organization understands the importance of following rules. From maintaining accurate records to meeting deadlines, every team member plays a role. By making compliance a priority, we not only protect our business but also set a strong foundation for long-term success.

Final Thoughts

Running a private limited company in India comes with its share of challenges, but staying compliant doesn’t have to be one of them. By following the checklist we’ve outlined—covering statutory, tax, labor, and other regulatory requirements—we can ensure that our business operates within the legal framework. Remember, compliance is an ongoing process, not a one-time task. With proper planning, professional support, and a commitment to staying updated, we can avoid penalties and focus on what truly matters: growing our business and achieving our goals. So, let’s take these steps seriously and build a company that stands the test of time.

FAQ

• What is the deadline for filing annual returns for a private limited company?
  • Annual returns (Form MGT-7) must be filed within 60 days of the Annual General Meeting, typically by November 29th.
• Is it mandatory to hold an Annual General Meeting (AGM)?
  • Yes, every private limited company must hold an AGM within six months from the end of the financial year.
• What happens if we miss the deadline for filing returns with ROC?
  • Late filing attracts a penalty of Rs. 100 per day until the filing is completed.
• Do small private limited companies need a statutory audit?
  • Yes, if the turnover exceeds Rs. 1 crore or net worth exceeds Rs. 25 lakhs, a statutory audit is mandatory.
• How often should board meetings be conducted?
  • A minimum of four board meetings must be held annually, with a gap of not more than 120 days between meetings.
• Is GST registration mandatory for all private limited companies?
  • No, it’s mandatory only if the turnover exceeds Rs. 20 lakhs for services or Rs. 40 lakhs for goods in most states.
• What are the penalties for not depositing TDS on time?
  • Late TDS deposit attracts interest at 1.5% per month from the due date until payment.
• Can a private limited company skip holding an AGM?
  • No, skipping an AGM can lead to penalties and legal consequences for the company and its directors.
• Is EPF registration mandatory for all companies?
  • It’s mandatory only if the company employs 20 or more employees.
• What is the role of a company secretary in compliance?
  • A company secretary helps ensure timely filings, maintains records, and advises on legal and regulatory matters.
• How can we track compliance deadlines?
  • Using a compliance calendar or software tools can help track deadlines and avoid penalties.
• What should we do if there’s a change in directors?
  • Any change in directors must be reported to the ROC within 30 days using the relevant forms.