Company compliance refers to the adherence of a company to various laws, regulations, and standards that govern its operations.
INTRODUCTION
Company compliance refers to the adherence of a company to various laws, regulations, and standards that govern its operations. Compliance is essential to ensure that a company operates ethically, legally, and in a manner that protects its stakeholders, including shareholders, employees, customers, and the environment.
In India, companies are required to comply with various regulations, including:
- Companies Act, 2013
- Securities and Exchange Board of India (SEBI) regulations
- Goods and Services Tax (GST) laws
- Income Tax laws
- Labour laws
- Environmental laws
Compliance involves:
- Filing annual returns and financial statements
- Maintaining statutory records and registers
- Obtaining necessary licenses and permits
- Conducting annual general meetings and board meetings
- Appointing auditors and ensuring audit compliance
- Filing tax returns and paying taxes
- Ensuring corporate governance and ethical business practices
Non-compliance can result in:
- Penalties and fines
- Legal action and prosecution
- Damage to reputation and brand image
- Loss of stakeholder trust and confidence
- Business disruption and closure
Therefore, it is crucial for companies to prioritize compliance and ensure that they have adequate systems and processes in place to meet all regulatory requirements.
The compliance checklist for Private Companies are as follows:
|
Particulars
|
Forms
|
Due Dates
|
Compliance
|
Penalties for Non-Compliance
|
|
Annual General Meeting (AGM)
|
N/A
|
On or before 30th September every year
|
Hold AGM to discuss financial statements and other matters
|
Penalty up to ₹1,00,000; daily fine for delay, up to ₹5,000 per day
|
|
Financial Statements Filing
|
Form AOC-4 / AOC-4 XBRL
|
Within 30 days from the date of AGM
|
File financial statements with the Registrar of Companies
|
Penalty of ₹100 per day, up to ₹5,00,000
|
|
Annual Return Filing
|
Form MGT-7/ 7A
|
Within 60 days from the date of AGM
|
File annual return with the Registrar of Companies
|
Penalty of ₹100 per day, up to ₹5,00,000
|
|
Board Meeting Minutes
|
N/A
|
Minimum four Board meetings every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board
|
Maintain and record minutes of board meetings
|
Penalty of ₹25,000 for non-maintenance, additional fines for delays
|
|
Director KYC
|
DIR-3 KYC
|
On or before 30th September every year
|
Ensure all directors file their KYC with the Ministry of Corporate Affairs
|
Penalty of ₹5,000 until the KYC is done
|
|
Statutory Audit
|
N/A
|
Annually
|
Conduct an audit of the company’s financial statements
|
Penalty of ₹50,000 or an amount equal to the remuneration of the auditor, whichever is less, and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees.
|
|
Tax Filings
|
Income Tax Return (ITR)
|
By September 30th (if extended)
|
File annual income tax return
|
Rs. 5000 if the return is furnished on or before the 31st day of December of the A.Y. or Rs. 10000 in any other case
|
|
Goods and Services Tax (GST)
|
GST Returns (GSTR-1, GSTR-3B)
|
Monthly/Quarterly
|
File GST returns as per the applicable frequency
|
Penalty of ₹100 per day, shall not exceed Rs. 5000.
|
|
Compliance with Labor Laws
|
N/A
|
As per specific law requirements
|
Ensure adherence to labor laws (e.g., PF, ESI, etc.)
|
Penalties vary by law; can include fines and legal action
|
Notes:
- Penalties can be substantial and vary based on the nature of the non-compliance and jurisdiction. The figures may differ in other regions.
- Always consult with a legal or compliance expert to ensure that all specific and up-to-date requirements are met to avoid penalties.
|
Event-based Compliances-
|
FORM
|
DUE DATE
|
DOCUMENTS REQUIRED
|
|
Change in Registered Office
|
|
|
|
|
- For change of office within the same city
|
INC -22
|
Within 30 days of passing Board Resolution
|
- Board Resolution
- NOC
- Rent/ Lease Agreement
- Utility Bill not older than 2 months
|
|
- For change of office Outside the city under the same ROC
|
MGT 14 & INC-22
|
Within 30 days of passing Special Resolution
|
- Special Resolution along with Explanatory Statement
- NOC
- Rent/ Lease Agreement
- Utility Bill not older than 2 months
|
|
- For change from one State to another State
|
MGT-14
|
Within 30 days of passing Special Resolution
|
- CTC of Special Resolution along with the Explanatory Statement
- Altered MOA
|
|
INC-23
|
For obtaining approval of CG
|
- Altered MOA
- Copy of Minutes of EGM
- Copy of Board Resolution
- List of creditors stating the amount due
- Declarations signed by two Directors stating- list of creditors given is complete and no other amount except the mentioned amount in the list is owed to them.
- Declarations signed by two Directors stating- that no employee will be retrenched as a result of a change in the registered office.
- Affidavit verifying the applications
- Affidavit verifying the list of Creditors
- Copy of latest Audited Financial Statement
- Form MGT-14 along with Challan
|
|
INC-22
|
Within 30 days from the date of approval
|
- NOC
- Rent/ Lease Agreement
- Utility Bill not older than 2 months
- Approval letter
|
|
Filing of Board/Special Resolution
|
MGT-14
|
Within 30 days
|
- Copy of Board/ Special Resolution
- Explanatory Statement in some cases
|
|
Increase in Authorized Share Capital
|
SH-7
|
Within 30 days
|
Copy of Ordinary Resolution
Altered MOA
|
|
Increase in Paid-up Share Capital
|
PAS 3
|
Within 30 days
|
List of allotees
Copy of Board/ Special Resolution
Valuation Report
Altered MOA
|
|
Change in name of the Company
|
MGT-14 & INC 24
|
Within 30 days
|
Copy of Special Resolution along with the Explanatory Statement
Altered MOA and AOA
|
|
Appointment of Auditors
|
ADT -1
|
Within 15 days
|
Copy of Resolution
Intimation by the Company
Consent by the Auditor
|
|
Creation of Charge
|
CHG- 1
|
Within 30 days from the creation
|
instrument containing details of the charge created or modified is mandatory.
|
|
Repayment of Loan
|
CHG- 4
|
Within 30 days from the date of Satisfaction of charge
|
mandatory attachment stating that the amount has been satisfied.
No Dues Certificate: From the charge holder.
Copy of Board resolution
|
APPLICABILITY OF XBRL (eXtensible Business Reporting Language)
XBRL is mandatory for certain classes of companies such as:
1. Companies listed on stock exchanges in India and their subsidiaries
2. Companies with paid-up share capital of ₹5 crore or more
3. Companies with turnover of ₹100 crore or more
4. All companies which are required to prepare their financial statements in accordance with Companies (Indian Accounting Standards) Rules, 2015
XBRL Filing Requirements:
1. Financial Statements (Balance Sheet, Profit & Loss Account, and Notes to Accounts)
2. Annual Return (Form MGT-7)
3. Cost Audit Report (Form CRA-4)
Exemptions:
1. Small companies
2. One-person companies (OPCs)
3. Private companies with turnover < ₹100 crore
4. Companies exempted by the Central Government