Annual Compliances for Pvt Ltd Companies – An overview
All Private Limited companies in India are governed by the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013. According to this act, every company, post incorporation, has to fulfil some, mandatory legal obligations. The compliance requirements are complex with each falling on different due dates and failing to meet them in a timely manner can greatly impact a company.
This may include paying heavy penalties (up to Rs. 1 lakh a year) or the companies and their directors getting blacklisted for a short period of time.
You should maintain a public record which consists of the company’s information which is called as the annual returns of the company, which will be available in the Companies Register. Every year, you are supposed to update the annual return companies regularly.
Limited Liability Partnership
Limited liability partnerships (LLPs) are required to meet fewer criteria for compliance on filing annual returns, in comparison to private limited companies. LLPs are required to provide information related to the statement of accounts, and returns, on an annual basis. Penalties, however, are huge for failure to comply. Entities that don’t provide the requisite information are fined heavily, with penalties that can go up to Rs. 5 lakhs.
Companies Fresh Start Scheme
The Ministry of Corporate Affairs (MCA) has launched Fresh Start Scheme 2020 and revised LLP Settlement Scheme 2020 to help law-abiding companies and LLPs. These schemes offer an opportunity for these companies to make a fresh start and clear their compliance defaults. This is an initiative from the MCA to incentivize compliance and reduce the compliance burden of companies. Both these schemes can be availed during the moratorium period from 1st April to 30th September 2020.