ANNUAL COMPLIANCES FOR PRIVATE LIMITED COMPANIES, PUBLIC LIMITED COMPANY, FOREIGN COMPANY, LLP, AND PARTNERSHIP FIRM
INTRODUCTION
The word “company” is derived from a Latin word composed of two words: “com” and “panies.” In Latin, the term ‘com’ means ‘with or together,’ and the word ‘panies’ means ‘bread.’ As a result, a corporation was defined as a group of people who shared a meal. In common usage, a company is defined as a group of people organized for the purpose of carrying out a business or endeavour. The term “Company” has been defined as a company incorporated under this Act or any earlier company law, according to Section 2(20) of the Companies Act, 2013. A company is a legal entity with a distinct legal identity and status from the individuals who make up its membership. A company’s most distinguishing attribute is its self-contained corporate existence.
In the eyes of the law, a corporation or Company is a person. It is treated as a separate entity from its members.
According to Section 4 of the Indian Partnership Act, 1932, a partnership form is nothing but a relationship between 2 or more individuals who have agreed to share the revenue of any business carried on by all or any of them acting for all partners. According to the above definition, a partnership consists of five elements: (1) a contract; (2) between two or more people; (3) who agree to carry on a business; (4) with the goal of sharing profits; and (5) the business must be carried on by all or any of them acting for all.
LLP stands for Limited Liability Partnership, and it combines the advantages of a corporation with the flexibility of a partnership. A limited liability partnership (LLP) is a legal entity that is separate from its participants and has a perpetual succession. LLP is referred to as a hybrid form between a company and a partnership since it incorporates aspects of both corporate and partnership firm structures.
In the event of the above forms of firms, it has to follow and report various compliances to the concerned authorities annually, half-yearly and quarterly.
ABOUT ANNUAL COMPLIANCES
A company becomes eligible and subject to various regulatory and procedural annual compliances from the time of its incorporation and registration under Indian laws and is required to comply with the various annual compliances laid down by various corporate laws such as the Companies Act, 2013, for taxes Income Tax Act 1961, GST Act 2017, SEBI Act (where the Company is a listed entity and the shares are listed in a recognized stock exchange), and so on.
Due to the fact that the majority of start-ups are registered as corporations, the annual compliance of a corporation has become a more prevalent issue for such rapidly growing firms. Frequently, such enterprises are unable to keep track of their annual compliance needs and, as a result, fall under the Ministry of Corporate Affairs’ inspection (MCA).
Compliance is essential of partnership businesses, just as it is for LLPs and companies incorporated in India. Compliance for partnership firms primarily entails filing an income tax return, whereas corporate organizations such as LLPs and Companies must file both an income tax return with the IRS and an annual return with the Ministry of Corporate Affairs.
Partnership enterprises with annual revenue of more than Rs.100 lakhs must also undergo a tax audit. Partnership firms may be needed to comply with TDS regulations, GST rules, VAT / CST regulations, Service Tax regulations, ESI requirements, and other requirements in addition to basic compliance. The kind of entity, industry, state of formation, number of workers, and sales turnover all influence the compliance requirements for a company.
IMPORTANCE OF COMPLIANCES
- The goal of compliance is to ensure that businesses behave appropriately. Compliance represents an opportunity to increase a company’s worth. This has several advantages, including making the Company a more appealing trading partner or investor, as well as more localized and direct benefits.
- The most obvious benefit of compliance is that it decreases the risk of fines, penalties, lawsuits, or a corporation’s closure in the case of insolvency or winding up. There are a slew of rules and regulations that govern how a business should conduct itself. If a company fails to meet specific compliance rules, it may face costly penalties.
- Employee protection is at the heart of many business compliance challenges. Employees are more likely to stay with you if they believe they work in a fair, professional, and safe atmosphere. Internal compliance with workplace safety, wages, employee benefits, compensations, and protection will foster a healthy work environment.
ANNUAL COMPLIANCES TO BE FOLLOWED
PUBLIC COMPANY: Section 2(71) of the Companies Act, 2013, states a public limited company as “Public company” means a company that is not a private company and has a minimum paid-up share capital, as may be prescribed; provided, however, that a company that is a subsidiary of a company that is not a private company is deemed to be a public company for the purposes of this Act, even if the subsidiary company’s articles continue to state that it is a private company. A Public Limited Firm is a company with limited liability that sells shares to the general public.
- ANNUAL COMPLIANCES FOR LISTED PUBLIC COMPANY
“Listed company” means a company whose securities/stocks are listed on any recognized stock exchange; provided, however, that such class of companies that have listed or intend to list such class or classes of securities as may be defined in consultation with SEBI or Securities and Exchange Board of India are not considered listed companies.
| SR NO. | FORM NO. | COMPLIANCE | PARTICULARS | DUE DATE |
| 1. | MGT-15 | Annual General Meeting | The Annual General Meeting will be held in accordance with the provisions of Section 121(1) of the Companies Act, 2013. | Within a period of 30 days from the date of its incorporation. |
| 2. | AOC-4 | Financial Statements | Cash Flow Statement, Balance Sheet, and Director’s Report Section 137 of the Companies Act, read with Rule 12(2) of the Companies (Accounts) Rules, 2014, require the Auditor’s report and consolidated financial statement to be prepared in the Extensible Business Reporting System (XBRL). | Within thirty days of conducting the Annual General Meeting or AGM |
| 3. | MGT-7 | Annual Return | According to section 92 of the Companies Act, 2013, read with Rule 11(1) of the Companies (Management and Administration) Rules 2014, information on the directors and shareholders must be filed with the relevant Registrar of Companies. | Within sixty days of conducting the Annual General Meeting(AGM) |
| 4. | MGT-14 | Financial and Director’s Report | Adoption of the Financial and Director’s Reports in accordance with Section 173 and Secretarial Standards. | Within thirty days from the Board Meeting |
| 5. | MR-3 | Secretarial Audit Report | When a company’s total paid-up capital is equal to or exceeds Rs.50 crores, or its annual turnover is equal to or exceeds Rs.250 crores, it must submit a secretarial audit report along with the board report, as required by Section 204 of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014. | Before appointment or reappointment of The Secretarial Auditors. |
| 6. | ITR-6 | Income Tax Returns | Before the Tax Department, income tax returns must be filed. | On or before 30th September of the financial year |
| 7. | Regulation 24A | A secretarial audit of a listed equity corporation and its substantial subsidiaries established in India is required. (as well as in XBRL) | Within 60 days of end of financial year | |
| 8. | Regulation 34 | The Listed entity must submit to the stock market and post on its website a copy of the annual report given to its shareholders, as well as the notice of the annual general meeting, no later than the day of the annual general meeting. The Business Responsibility Report will be applicable to the top 1000 listed firms (by market capitalization), with voluntary reporting beginning in Financial Year 2021–22 and mandatory reporting beginning in Financial Year 2022–23. | Not later than the first day of the annual general meeting and no later than 21 days before the annual general meeting. | |
| 9. | Regulation 44 | Results of the voting must be submitted. | Within 48 hours following the General Meeting’s conclusion | |
| 10. | SEBI LCB Circular | Large Corporate Borrower’s Annual Disclosure on Advanced Borrowing | Within 45 days from end of financial year | |
| 11. | SEBI LCB Circular | Initial Disclosure of classification as large corporate borrower | 30 days from end of financial year |
| SR NO. | FORM NO. | COMPLIANCE | PARTICULARS | DUE DATE |
| 1. | Board Meeting | As per Section 173 of the Companies Act, discussions on the appointment or reappointment of an auditor or any other relevant problems. | A minimum of 4 Board meetings are held each year. | |
| 2. | CRA-2 | Appointment of Cost Auditor | Issue a Letter of Appointment to the Cost Auditor and notify the Central Government of its appointment, as required under Section 148(3) of the Companies (Cost Records and Audit) Rules, 2014, as well as Rules 6(2) and 6(3A) of the Companies (Cost Records and Audit) Rules, 2014. | Original appointments must be completed within 30 days of the Board meeting or 180 days of the fiscal year, whichever comes first. Casual vacancies must be filed within 30 days of the Board meeting. |
| 3. | MGT-14 & Form DIR-12 | Appointment of Chief Executive Officer, Company Secretary, or Chief Financial Officer. | Section 203 read with Rules 8 and 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, provide for the appointment of a full-time or casual Chief Executive Officer, Company Secretary, or Chief Financial Officer. | Within 30 days of the Annual General Meeting, and within 6 months in the case of a casual vacancy. |
| 4. | DPT-3 | Return of Deposits(DPT) | According to Rule 16 of the Companies (Acceptance or Deposit) Rules, 2014, the Return of Deposit must be reported with the Registrar of Companies (ROC). | Every year on June 30th. |
| 5. | Annual General Meeting | Conducting an Annual General Meeting for the purpose of declaring dividends in accordance with Section 96 of the Companies Act, 2013. | Within 9 months of the completion of the fiscal year, the first Annual General Meeting will be convened. | |
| 6. | Special Resolution | Section 117 of the Companies Act, 2013, and Rule 24 of the Companies (Management and Administration) Rules, 2014, were used to pass a special resolution at the Annual General Meeting. | Within 30 days after the resolution’s passage. | |
| 7. | CSR Committee | Hold a meeting to approve CSR activities in accordance with Section 135 of the Companies Act, 2013, as well as the Companies (Corporate Social Responsibility Policy) Rules, 2014, and SS-1. | There will be four Board meetings, with a minimum of 120 days between each one. | |
| 8. | MBP-1 | Disclosure of Details of Director | Section 184(1) of the Companies Act, 2013 and Rule 9(1) of the Companies (Meetings of Board and its Powers) Rules, 2014 require directors to disclose financial interests in the firm. | After its appointment in first meeting. |
| SR NO. | FORM NO. | COMPLIANCE | PARTICULARS | DUE DATE |
| 1. | Board Meeting | The first Board of Directors meeting, as required by Section 173, is held (1). | Within 30 days of the Incorporation of the Company | |
| 2. | MBP-1 | Disclosure of Details of Director | Section 184(1) of the Companies Act, 2013 and Rule 9(1) of the Companies (Meetings of Board and its Powers) Rules, 2014 require directors to disclose financial interests in the firm. | After its appointment in the first meeting. |
| 3. | DIR-8 | Disclosure of Details of Non Qualification of Director | Each Financial Year, each Director of the Company will file disclosure of non-disqualification with the Company in accordance with Section 164(2) of the Companies Act, 2013. | |
| 4. | MGT-7 | Annual Return | According to section 92 of the Companies Act, 2013, read with Rule 11(1) of the Companies (Management and Administration) Rules 2014, information on the directors and shareholders must be filed with the relevant Registrar of Companies. | Within sixty days of conducting the Annual General Meeting(AGM) |
| 5. | MGT-15 | Annual General Meeting | The Annual General Meeting will be held in accordance with the provisions of Section 121(1) of the Companies Act, 2013. | Within 30 days from the date of its incorporation. |
| 6. | AOC-4 | Financial Statements | Cash Flow Statement, Balance Sheet, and Director’s Report Section 137 of the Companies Act, read with Rule 12(2) of the Companies (Accounts) Rules, 2014, require the Auditor’s report and consolidated financial statement to be prepared in the Extensible Business Reporting System (XBRL). | Within thirty days of conducting the Annual General Meeting or AGM |
| 7. | MGT-18 | A Company Secretary in Practice must certify that the Company has a paid-up share capital of Rs. 10 crores or a turnover of Rs. 50 crore as per Section 92 of the Companies Act, 2013. | ||
| 8. | Financial Statements and Other Important Documents are to be circulated | Financial Statements and Other Important Documents are to be circulated. The Company will submit approved Financial Statements (including consolidated Financial Statements), Cash Flow Statements, Directors’ Reports, and Auditors’ Reports to the Company’s members. | A minimum of 21 days before to the Annual General Meeting | |
| 9. | ADT-1 | Appointment of Auditor | The Auditor will be appointed for a period of 5 (five) years, and a form ADT-1 will be filed for that period. Following that, shareholders will confirm the Auditor at the annual general meeting (AGM), but there will be no requirement to file an ADT-1 under Section 139 of the Companies Act. | Within 15 days from the date of appointment of the Auditor |
- ANNUAL COMPLIANCE FOR FOREIGN COMPANY
Any corporation or body corporate incorporated outside India that has a place of business in India, whether directly or through an agent, physically or electronically, and performs any business activity in India in any other way is referred to as a “foreign company.”
When compared to a native firm, a foreign corporation in India is required to follow special or modified provisions. The Foreign Exchange Management Act must be followed by a foreign corporation when making an investment or opening an office in India (FEMA).
| SR NO. | FORM NO. | COMPLIANCE | PARTICULARS | DUE DATE |
| 1. | Annual return for Foreign Liabilities and assets | All India resident enterprises that received FDI or made ODI in the preceding year, including the present year, are required to file an annual return for foreign liabilities and assets or FLA Return. | Every year on July 15th. | |
| 2. | ODI Part II | Annual Performance Report | In respect of each Joint Venture, Wholly Owned Subsidiaries (WOS) outside India, an Indian Party, Resident Individual who has done an Overseas Direct Investment (ODI) must submit an Annual Performance Report (APR) to the AD bank. | Every year on or before the 31st of December. |
| 3. | ECB 2 Return | Transactions which are EBC in nature | All ECB transactions must be reported to the RBI on a monthly basis through an AD Category – I Bank. | On a monthly basis. |
| 4. | Single Master Form | Single Master forms FC-GPR, FC-TRS, LLP-I, LLP-II, CN, ESOP, DI, DRR, and InVi are to be filed and submitted under the heading Single Master form FC-GPR, FC-TRS, LLP-I, LLP-II, CN, ESOP, DI, DRR, and InVi are to be filed and submitted. The Reserve Bank of India (the “RBI”) produced a user manual (the “SMF Manual”) on September 1, 2018, to clearly lay out the procedure for filing a single master form (the “SMF”), which will combine existing foreign investment reporting standards in India. | ||
| 5. | Advance Reporting Form | An Indian firm that receives investment from outside India for the purpose of issuing shares or other qualifying instruments under the FDI Scheme must notify the amount of consideration to the Reserve Bank’s Regional Office via its AD Category I bank. | Within 30 days of the date of the stock’s issuance | |
| 6. | FC-GPR | When a firm accepts foreign investment and allots shares to that foreign investor in exchange for that investment, it is the corporation’s responsibility to file information of that allotment of shares. | Within 30 days | |
| 7. | FC-TRS | Foreign Currency Transfer | When a shareholder from outside India transfers his or her shares to an Indian, he or she must complete this form. The FC-TRS form, along with the FC-GPR form, will be sent to the approved dealer bank, which will then send it to the RBI. | |
| 8. | Form ODI | Overseas Direct Investment | Form ODI must be completed by an Indian party and a resident individual undertaking an overseas investment. When you receive share certificates or any other documentary evidence of investment in a foreign JV / WOS as an evidence of investment, you must present it to the authorized AD. | Within 30 days of Receipt of Share Certificate. |
| SR NO. | FORM NO. | COMPLIANCE | PARTICULARS | DUE DATE |
| 1. | LLP Form 11 | Annual Return | Section 35 of the Limited Liability Act requires the filing of an annual return. | Every year on or before the 30th of May. |
| 2. | LLP Form 8 | Statement of Account and Solvency | Annual Accounts, Statement of Accounts, Financial Statements, P&L, and Balance Sheet are all required to be filed. | Every year on or before the 30th of October. |
| 3. | ITR-5 | Income Tax Return | LLPs with annual sales of less than Rs. 40 lakh or a partner contribution obligation of more than Rs. 25 lakh are obliged to file their income tax returns. They are exempt from having their finances audited by their Auditor. | Every year on July 31st |
| 4. | ITR-5 | Income Tax Return | If an audit is necessary, LLPs with annual sales of more than Rs. 40 lakh or a partner contribution obligation of more than Rs. 25 lakh are required to file their income tax returns. The Income Tax Act requires them to have their books audited. | Every year on September 30th |
| 5. | ITR-5 Form 3ECB | Income Tax Return | Involvement of LLPs in International Transactions LLPs must file Form 3CEB if they engaged in an overseas transaction with affiliated enterprises or engaged in certain Specified Domestic Transactions. A Chartered Accountant must certify Form 3CEB. |
- ANNUAL COMPLIANCE FOR PARTNERSHIP FIRM
| SR NO. | FORM NO. | COMPLIANCE | PARTICULARS | DUE DATE |
| 1. | ITR-5 | Income Tax Return | A firm who is not required to get its accounts audited under the Income Tax Act, 1961 by filing the return on paper; by filing the return electronically with a digital signature; by transmitting the data in the return electronically with an electronic verification code; and by transmitting the data in the return electronically and then submitting the return verification. | Every year on July 31st of the assessment year |
| 2. | ITR-5 | Income Tax Return | A firm who is required to get its accounts audited under the Income Tax Act, 1961 by filing the return on paper; by filing the return electronically with a digital signature; by transmitting the data in the return electronically with an electronic verification code; and by transmitting the data in the return electronically and then submitting the return verification. | Every year on September 30th of the assessment year |
| 3. | ST-3 | Service tax based on self-assessment | A self-assessed statutory document issued by the Ministry of Finance’s Central Board of Excise and Customs to enable service providers to disclose the value of taxable services delivered or received, as well as the taxes paid on those services. After crossing taxable services worth more than Rs.10 lakhs in a financial year, service tax collection and remittance become mandatory. |
CONCLUSION
From an integrity standpoint, the Company’s decision to be transparent about organizational compliance sends a strong statement that it is committed to ethical behaviour. Minimal compliance, on the other hand, has no inherent commercial value. Pulling back the curtain to show that a corporation or firm is following basic regulatory criteria will do little to help the Company’s reputation as a trustworthy organization.
Situational or market-driven circumstances, such as elections and escalating geopolitical tensions, are just as likely to increase compliance risks as flaws in a company’s compliance system. A practical compliance framework is to be implemented, allowing businesses to manage risks with more confidence.