If you are the director or owner of any of the business entities in India, there is some compliance that you would have to adhere to. Adhering to these compliances is not something that can be construed as optional. These compliances have always been there. However, as per the Companies Act of 2013, there have been some major changes to the annual compliances. Furthermore, with the introduction of eForm KYC in 2018, some more changes are on the way.
Some of the compliances that are common to all the types of business entities are as follows:
- Annual return: The new annual return forms are with the MGT-7. This new format is a much more focused and an enlarged one. You will need to entail a lot more details here.
- Director’s report: The new compliances make it necessary that the reports o the general meetings are also added to the report.
- The eKYC form: While people needed to only opt for filing for DIN once, they will need to confirm their existence with filing eKYC form annually. This is an annual procedure in which failing to comply will lead to DIN closure.
Mandatory Compliance for Companies
- Appointment of auditor: A form of ADT-1 will be filed to appoint and auditor for 5 years. The auditor is appointed within one month of the company’s incorporation.
- Statutory audits: the company will have to prepare all the accounts and then these accounts will be audited by the appointed auditor. Once audited, the financial statements will then be forwarded to the registrar of Companies. This is an especially mandatory compliance for private limited companies
- Annual return filing: After holding an AGM (Annual General Meeting), the owners of private limited companies have about 60 days to file annual return. This return has to be filled between 1st April and 31st March. The form to be filed here is MGT-7.
- Filing of financial statements: it is mandatory for every company to file its balance sheet and the statement of profit and loss account. The form to be filled here is AOC-4.
- Holding him annual general meeting: every year, an annual general meeting is to be held. This is to be held within 6 months of the closing of that financial year.
- Director’s report preparation: All the mentioned under the section 134 is to be filled in the Director’s report.
- DIR-3 KYC eForm filing: After 2018, it has been made mandatory for the company owners to Annual file the DIR-3 KYC eForm if they want to retain their DINs.
- Annual income tax return: An ITR-6 is also needed to be filing detailing the income tax paid.
These mandatory compliances are necessary for almost every form of business entity including Private limited companies, Once person Companies and others.