Annual compliance checklist for startups and smes in India

Annual Compliance Checklist For Startups & SMEs in India

It’s that time of the year when the calls to your CA just don’t stop. With the financial year coming to an end and with the complex compliances in India it’s not uncommon for you to have sleepless nights during this time of the year.

As dreadful as complying with guidelines might sound, it isn’t something any business owner or CEO of a growing startup can ever take lightly. Failing to comply with statutory guidelines can leave your business vulnerable to hefty fines and in cases, legal action might also be taken.

Whether you run an OPC or a private limited company there are multiple compliances – income tax filing, directors report, the appointment of an auditor – laid out by various statutes and regulatory bodies.

To make your life a little simpler during this year-end below is a compliance checklist for SMEs and startups in India. In this article, we will be covering the following 

 

Annual Compliance For One Person Company (OPC)

Section 2(62) of Companies Act defines a one person company as a company that has only one person as its member. Furthermore, members of a company are nothing but subscribers to its memorandum of association, or its shareholders. So, an OPC is effectively a company that has only one shareholder as its member.

S. No. Compliance Section & Rules Particular of Compliance
1. Receipt of MBP-1 184(1) Form MBP- 1 Every Director of the Company in the First Meeting of the Board of Director in each Financial Year will disclose his interest in other entities.
Every Director is required to submit with the Company fresh MBP-1 whenever there is a change in his interest from the earlier given MBP-1.
2. Receipt of DIR- 8 164(2) Form DIR – 8 Every Director of the Company in each Financial Year will file with the Company disclosure of non-disqualification.
Meaning of AGM for the OPC means “Resolution passed for the ordinary Business entered into the Minute Book. In the case of OPC, there is no need to hold AGM because there is only one Member.
3. E- Forms Filing Requirements 92 E-form:MGT-7 Annual Return: OPC will file its Annual Return within 60 days of entry of ordinary resolution in Minute Book. Annual Return will be for the period 1st April to 31st March.

In Case of OPC, there is no need to hold AGM.

4. 137 E-form: AOC-4 Financial Statement: The Company is required to file its Balance Sheet along with the statement of Profit and Loss Account and Directors’ Report in this form.
Attachment:

Balance Sheet, Statement of Profit& Loss Account, Directors’ Report, Auditors’ Report and Notice of AGM.

5. Directors’ Report 134 Directors’ Report shall be prepared by mentioning of all the information required for Small Company under Section 134.
It should be signed by only One Director.
6. Circulation of Financial Statement & other relevant Dox 136 Company shall send to the Members of the Company approved Financial Statement, Directors’ Report and Auditors’ Report at least 21 clear days before the date of AGM.
7. Board Meetings 173 & SS-I OPC shall hold a minimum number of two meetings of its Board of Directors every year in such a manner that minimum gap between both the meetings, should be not less than 90 (Ninety) days.
8. Appointment of Auditor 139 E-form: ADT-1 The auditor will be appointed for the 5 (Five) year and form ADT-1 will be filed for a 5-year appointment.
After that every year in AGM, the shareholder will ratify the Auditor but there is no need to file ADT-1.
Above mentioned 9 (Nine) Compliances are Mandatory Yearly compliances for the Private Limited Company. Except above 8 (Eight), there may be event-based compliances for the Small Company.

(Source: TaxGuru.in)

Annual Compliance For Small Company

According to the Companies Act 2013 under section 2(85), a small company is one which has paid-up capital of not more than Rs.50,00,000 and whose turnover is not more than Rs. 2 crore.

S. No. Compliance Section & Rules Particular of Compliance
1. Receipt of MBP-1 184(1) Form MBP- 1 Every Director of the Company in First Meeting of the Board of Director in each Financial Year shall disclose his interest in other entities.
Every Director is required to submit with the Company a fresh MBP-1, whenever there is a change in his interest from the earlier given MBP-1.
2. Receipt of DIR- 8 164(2)

143(3)(g)

Form DIR – 8 Every Director of the Company in each Financial Year will file with the Company disclosure of non-disqualification.
3. E- Forms Filing Requirements 92 E-form: MGT-7 Annual Return: Every Small Company will file its Annual Return within 60 days of holding of Annual General Meeting. Annual Return will be for the period 1st April to 31st March.
4. 137 E-form: AOC-4 Financial Statement: Company is required to file its Balance Sheet along with the Statement of Profit and Loss Account and Directors’ Report in this form.
Attachment:

Balance Sheet, Statement of Profit& Loss Account, Directors’R report, Auditors’ Report and Notice of AGM.

5. Directors’ Report 134 Directors’ Report shall be prepared by the mention of all the information required for Small Company under Section 134.
It should be signed by the “Chairperson” authorized by the Board, where he is not so authorized by at least 2 Directors.
6. Circulation of Financial Statement &other relevant Dox 136 The company will send to the members of the Company approved Financial Statement, Directors’ Report and Auditors’ Report at least 21 clear days before the Annual General Meeting.

(Except in case of AGM is called on Shorter Notice)

7. Notice of

AGM

101 & SS-II Every Notice of Annual General Meeting will be prepared as per Section 101 of Companies Act 2013 and Secretarial Standard – II.
8. Sending of Notice of AGM 101 & SS Notice of Annual General Meeting will be sent to the following:

• All Directors, Members, Statutory Auditor.

9. Board Meetings 173 &

SS-I

Every Company shall hold a minimum number of Two Meetings of its Board of Directors every year in such a manner that Minimum gap between both the meetings not less than 90 (Ninety) days.
10. Appointment of Auditor 139 E-form ADT-1 The auditor will be appointed for the 5 (Five) year and form ADT-1 will be filed for a 5-year appointment.
After that every year in AGM, Shareholder will ratify the Auditor but there is no need to file ADT-1.
Above mentioned 10 (Ten) Compliances are mandatory yearly compliances for the Small Private Limited Company. Except above 10 (Ten), there may be event-based compliances for the Small Company.

(Source: TaxGuru.in)

Annual Compliance For Private Limited Company Other Than Small Company

S. No. Compliance Section & Rules Particular of Compliance
1. Receipt of MBP-1 184(1) Form

MBP- 1

Every Director of the Company in the First Meeting of the Board of Director in each Financial Year will disclose his interest in other entities.
Every Director is required to submit with the Company fresh MBP-1 whenever there is a change in his interest from the earlier given MBP-1.
2. Receipt of DIR- 8 164(2) Form

DIR – 8

Every Director of the Company in each Financial Year will file with the Company disclosure of non-disqualification.
3. E- Forms Filing Requirements 92 E-form:

MGT-7

Annual Return: Every Small Company will file its Annual Return within 60 days of holding of Annual General Meeting. Annual Return will be for the period 1st April to 31st March.
4. 137 E-form:

AOC-4

Financial Statement: Company is required to file its Balance Sheet along with the statement of Profit and Loss Account and Director Report in this form.
Attachment:

Balance Sheet, Statement of Profit& Loss Account (Including Consolidated Financial Statement), Directors’ Report, Auditors’ Report, Cash Flow Statement and Notice of AGM.

5. 92 MGT-8 Private Company:

Having paid up share capital of 10 Crore or more or turnover of Rs. 50 crore or more shall be certified by a Company Secretary in Practice.

6. Directors’ Report 134 Directors’ Report will be prepared by the mention of all the information required under Section 134.

It should be signed by the “Chairperson” authorized by the Board, where he is not so authorized by at least 2 Directors.

7. Circulation of Financial Statement & other relevant Dox 136 The company will send to the members of the Company approved Financial Statement (including consolidated Financial Statement), Cash Flow Statement, Directors’ Report and Auditors’ Report at least 21 clear days before the Annual General Meeting.

(Except in case of AGM is called on Shorter Notice).

8. Notice of

AGM

101 & SS-II Every Notice of Annual General Meeting will be prepared as per Section 101 of Companies Act 2013 and Secretarial Standard – II.
9. Sending of Notice of AGM 101 & SS Notice of Annual General Meeting will be sent to the following:

• All Directors, Members, Statutory Auditor

Secretarial Auditor (if any)

10. Board Meetings 173 & SS-I Every Company shall hold a minimum number of four meetings of its Board of Directors every year in such a manner that maximum gap between two meetings should not be more than 120 (One hundred twenty) days. The company should hold at least 1 (one) Board Meeting every quarter of the calendar year.
11. Appointment of Auditor 139 E-form

ADT-1

The auditor will be appointed for the 5 (Five) year and form ADT-1 will be filed for a 5-year appointment.
After that, every year in AGM shareholder will ratify the Auditor but there is no need to file ADT-1.
12. Appointment of Company Secretary 203 Private Company having paid up share capital of Rs. 5 crores more required to appoint whole time Company Secretary.
13. Maintenance of Registers 88 The company will maintain the following mandatory Registers:

• Register of Director, Director of Shareholding, Members.

14. Annual Return 92 Annual Return of Every Private Company (Except Small Company) should be signed by Company Secretary in Practice., if there is no whole time Company Secretary.
Above mentioned 14 (Fourteen) Compliances are Mandatory Yearly compliances for the Private Limited Company. Except above 13 (Thirteen) there may be event-based compliances for the Company.

(Source: TaxGuru.in)

We certainly hope that this helps ease some anxieties during this year-end. Just follow that checklist to make sure you’re compliant with the necessary guidelines and your business is safe from any punitive damages.

  •  
  •  
  •  
  •  
  •  
  •