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Optional filling Annual GST Return-possible impact

Sudheendra Kumar
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Optional filling Annual GST Return-possible impact

GSTR 9 Annual Return for Turnover less than 2 Crore, is optional, and if taxpayer chose not to filed before 30th November it would be deemed to filed on due date. 

The Annual Return filing date for FY 2017-18 has been extended three-time and recently the government has extended the last date of filing annual goods and services tax (GST) return from 31st August to 30th November 2019. In the 37th GST Council meeting held on 20th September 2019, it was decided that GSTR-9 filing for businesses with turnover up to Rs 2 crore would be made optional, but notification issued has some inherit flaws as usual between what coucilc proposed and what actual notification issued.

Recent Notification issued by CBIC vide its Notification No:49/2019 dated 9th October 2019 has stated that the Central Government, on the recommendations of the Council, hereby notifies those registered persons whose aggregate turnover in a financial year does not exceed two crore rupees and who have not furnished the annual return under sub-section (1) of section 44 of the said Act read with sub-rule (1) of rule 80 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules) before the due date, as the class of registered persons who shall, in respect of financial years 2017-18 and 2018-19, follow the special procedure such that the said persons shall have the option to furnish the annual return under sub-section (1) of section 44 of the said Act read with sub-rule (1) of rule 80 of the said rules. Provided that the said return shall be deemed to be furnished on the due date if it has not been furnished before the due date.

It means if you chose not to file annual return within due date for the reason that your turnover was below 2 crore, it will be presumed you have filed annual return. Now questions is what will be annual return in such case?. It may be auto populate data annual return or it may be summary of GSTR 3 B and GSTR 1 summary deemed to be annaul return. In author view auto populate data will be presumed to be  and your annual return GSTR 9 and lateron you will not have option to correct it.

So, in author view no one will opt for non filing of Annual return options as provided by Notification 49/2019. Since, 2017-18 was the 1st year and everyone of us has committed some mistake while filing GSTR 3B or GSTR 1.

Hence, Government has indirectly didn’t give any options not to file Annual Return GSTR 9 instead In author view it should be filed with due reconciliation.

GOVT AGAINST ATTACHMENT OF INSOLVENT FIRM’S ASSETS ONCE CIRP IS COMPLETED – FINANCIAL EXPRESS.

Sudheendra Kumar
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GOVT AGAINST ATTACHMENT OF INSOLVENT FIRM’S ASSETS ONCE CIRP IS COMPLETED – FINANCIAL EXPRESS.

In its affidavit submitted on October 10, the MCA said once a resolution plan is approved by the NCLT, it is binding on all stakeholders.

The Ministry of Corporate Affairs (MCA) is of the view that once the corporate insolvency resolution process (CIRP) is completed against an insolvent firm, there cannot be any attachment or confiscation of its assets by enforcement agencies.

Replying to a notice issued to it by the National Company Law Appellate Tribunal (NCLAT), which is hearing an application moved by JSW Steel seeking immunity from attachment of any asset of Bhushan Power and Steel (BPSL) post takeover, the MCA said the provision of the Insolvency and Bankruptcy Code (Amendment) Act, 2019 makes it amply clear that a resolution plan is binding on the central government and all statutory authorities.

JSW Steel’s `19,700-crore bid for BPSL was approved by the National Company Law Tribunal (NCLT) on September 5. While approving the bid, the NCLT did not grant JSW Steel protection from attachment of assets on account of acts of omission or commission of the previous directors under the Prevention of Money Laundering Act (PMLA).

JSW Steel had on September 13 filed an application with the NCLAT seeking protection of insolvent firm’s assets after takeover. On this, the NCLAT issued notices to various stakeholders including the committee of creditors and the MCA.

In its affidavit submitted on October 10, the MCA said once a resolution plan is approved by the NCLT, it is binding on all stakeholders. “Before approving the resolution plan, objections are heard by the adjudicating authority and once hearing on the resolution plan and objections is completed before the adjudicating authority and the resolution plan is approved, such resolution plan is binding on all stakeholders, including all government agencies,” the MCA said in the affidavit.

Meanwhile, the Enforcement Directorate (ED) on October 12 said it has attached assets worth over `4,000 crore of BPSL in connection with a money-laundering probe. In the affidavit, the MCA said while conducting investigation under the PMLA, the ED is free to attach personal assets of the erstwhile promoters and other accused persons, acquired through crime proceeds, and not assets of the corporate debtor which have been financed by creditors and acquired by a bona fide third party resolution applicant through the statutory process supervised and approved by the adjudicating authority under the Insolvency and Bankruptcy Code (IBC).

“The purpose and scheme of the CIRP is to hand over the company of the corporate debtor to a bona fide new resolution applicant. Any threat of attachment of the assets of the corporate debtor or subjecting the corporate debtor to proceedings by investigation agencies for wrongdoings of the previous management will defeat the very purpose and scheme of CIRP, which inter-alia includes resolution of insolvency and revival of the company, and the efforts of the banks to realise dues from their NPAs would get derailed,” the MCA said in the affidavit.

“Otherwise too, the money realised by way of resolution plan is invariably recovered by the banks and public financial institutions and other creditors who have lent money to the erstwhile promoters to recover their dues which they have lent to the erstwhile management for creation of moveable or immoveable assets of the corporate debtor in question, and therefore, to attach such an asset in the hands of the new promoters or resolution applicant would only negate the very purpose of IBC and eventually destroy the value of the assets,” it said.

Upon acquisition under CIRP by a resolution applicant, the corporate debtor and its assets are not derived or obtained through proceeds of crime under the PMLA and need not be subject to attachment by the ED after approval of resolution plan by the adjudicating authorities.

New E-Assessment Scheme in Income Tax

Sudheendra Kumar
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New E-Assessment Scheme in Income Tax

As per the CBDT notification dated 12th September, 2019, new faceless income tax scrutiny Assessment Scheme has been announced. The said scheme will be rolled out from 8th October,2019 on the occasion of “Vijayadashmi – a festival of good over evil”, signifying the end of older- time consuming and often frustrating scheme where the assessee used to visit the department, and marking a new beginning in which all the communication would be made online.

The scheme has been launched with the motive of greater transparency and online communication contributing towards digital India.

After the introduction of this scheme, many of you might be having some questions in your mind. So, I have tried to answer some of these questions by way of FAQs.

Q. What is this E-assessment Scheme ? 

Ans : A scheme introduced by the Ministry of Finance in the budget 2019, notified on 12 Sep, 2019 for conducting faceless scrutiny assessment of income tax returns through online process.

Q. What is the objective of E-Assessment Scheme?

Ans : The main objective of this e-assessment scheme is to ensure greater transparency and to eliminate tax terror, which the taxpayers usually have in their mind- as they have to be physically present at the department either in their individual capacity or through their authorized representatives. Some other objectives are as follows :

To facilitate exchange of communication between the tax authorities and the taxpayers exclusively by electronic mode for ensuring greater transparency and accountability.To design a platform for complete anonymous online process.Also, to remove any form of human interference for the income tax assessment procedure and will be time saving for taxpayers and their authorized representatives as they don’t have to commute to the department and wait for the officers to deal with their matter.

Q. When will the e-assessment scheme commence from and when will it be applicable from?

Ans : As announced by Our Finance Minister Nirmala Sitharaman the scheme will be rolled out from 8th October, 2019 on the occasion of Vijayadashmi and will be applicable for all notices issued on or after 1st October, 2019.

Q. Will this scheme make life of professionals easy or difficult?

Ans : It will actually make it easy as now they don’t have to visit the department and the communication will be done through online portal which in turn will be time saving for them. 

Q. What is the procedure of E-assessment?

Ans : The process under e-assessment scheme is as follows :-

  1. The first and the foremost step in the process is that the notice of scrutiny will be issued to the taxpayer by the central system. The notice issued will be sent electronically on the taxpayer’s account on the E-filing website, to the registered email address of the assessee.
  2. After the receipt of the notice assessee has to submit its reply within 15 days from the date of receipt of notice to National E-Assessment Center through his registered account.
  3. Now the assessee will no longer have to visit the department with regard to submission of documents in response to the notice. And all the communication between the assessee and the department would be done electronically through online portal.
  4. The NEC (National E-assessment center) can assign scrutiny case to any assessment unit regional centers through an automated allotment system.
  5. Assessment Unit will then, on the basis of the information and inputs, will prepare the draft assessment order and send to NEC for review and suggest the changes if any.
  6. And if the order is prejudicial to the assessee, an opportunity will be provided to the assessee to respond. If the response is made by the assessee then it will be forwarded to Assessment Unit and if no response is received from the assessee then the draft order would be finalized and the records would be sent to Assessing Officer and the Assessee.

Q. Who will conduct e-assessment proceedings?

Ans : The following centers will be established to conduct e-assessment proceedings which are as follows :

National E-assessment center (NEC) : It will act as a regulatory committee to execute rules and regulations and monitor regional centers. Also, if required it may assess, verify, modify and send show cause notice to the assessee.Regional E-assessment Centers : This center is established with the aim to execute the actions as informed by the NEC. And the division will be monitored by the Principal Chief Commissioner to assess the regulation and process.

Q. What will be the organizational structure of E-assessment?

Ans : With the aim of easing the process of assessment for taxpayers, along with the multiple nodal bodies such as national e-assessment center and regional centers, four units have been established to facilitate e-assessment. Such units are as follows:-

Assessment Unit : The functions of this unit will be to request or to provide information for the issues raised and will also scrutinize the information provided by the assessee.Verification Unit : This unit will examine books of accounts, statements and will send enquiry to assessment or technical units for clarification on documents.Technical Unit : This unit is set up to assist with legal, forensic, data analytics, valuation or any other related technical requirements.Review Unit : The role of this unit will be to assess all the documents sent by the assessee, reviewing the draft assessment order and will also review the relevant points added as per the guidelines of NEC.

CONCERNED ABOUT STRESS IN FINANCIAL SECTOR, GOVERNMENT TO BRING NBFC’S UNDER INSOLVENCY CODE -THE TIMES OF INDIA

Sudheendra Kumar
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CONCERNED ABOUT STRESS IN FINANCIAL SECTOR, GOVERNMENT TO BRING NBFC’S UNDER INSOLVENCY CODE -THE TIMES OF INDIA

The government is set to bring non-banking finance companies within the ambit of the Insolvency and Bankruptcy Code, but in a slightly tweaked form, for smoother resolution of these entities and firewall the rest of the financial system from any possible adverse impact.
The move comes at a time when several NBFC’s are under stress and is based on the government’s experience with IL&FS, where it had to step in and appoint a new board after superseding its directors. A year down the line, resolution has been slow and the government has been forced to step in to ensure smooth resolution of assets to ensure that banks and finance companies that have an exposure to IL&FS group are not impacted by the crisis.
But unlike other companies, where a resolution professional is appointed by the National Company Law Tribunal, the ministry of corporate affairs and the department of economic affairs in the finance ministry are working out an arrangement that draws from the Financial Resolution and Deposit Insurance Bill, which was withdrawn.
The bill had provided for setting up a Resolution Corporation that would take over the management of the finance company once it was classified as “critical”.The Resolution Corporation was also proposed to be tasked with classifying a financial services entity as a low, moderate, material or critical risk entity.
“This can be an interim arrangement till the FRDI bill is revived,” said a source, adding that banks would stay outside the ambit of the insolvency law that is seen to be speeding up resolution of stressed companies that were unable to clear their dues to banks.
The Insolvency Law Committee, appointed by the ministry of corporate affairs, is working out the details of the plan, said sources.
Unlike IBC, which stipulates resolution within 180 days, with possible extension of another 90 days, the FRDI bill had provided for resolution of a financial services entity within a year, with a possible extension by another year.
Like in the case of other companies, resolution can be undertaken through merger or acquisition, transfer of assets, liabilities and management to a temporary firm, or via liquidation. In case a resolution was not possible even after two years, the financial services company could have been liquidated.
Sources said that the inclusion of NBFC in the IBC ambit may not require legislative changes.

5 Main Salient features of Code on Social Security 2019…….

Sudheendra Kumar
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5 Main Salient features of Code on Social Security 2019…….

5 Main Salient features of Code on Social Security 2019…….


1) Insurance, PF, life cover for unorganized sector employees:
The draft code says the “Central Government shall formulate and notify, from time to time, suitable welfare schemes for unorganised workers on matter relating to life and disability cover; health and maternity benefits; old age protection; and any other benefit as may be determined by the central government”.
While framing of schemes, the draft says the states may also formulate and notify suitable initiatives for unorganized workers, including schemes relating to provident fund, employment injury benefit, housing, educational scheme for their children, old age and funeral assistance.
Bulk of India’s labour force is in informal sector and a move looks forward looking but most of key initiatives it suggest may be the decision of the states with little contribution from the centre. There may be unorganized sector social security boards at the centre and state levels.


2) Corporatization of EPFO and ESIC:
The pension, insurance and retirement saving bodies including EPFO and ESIC will be body corporate. The world body corporate has been added in the draft and may bring in a departure from the current autonomous body status of such organization. The draft also talks about appointment of chief executive officers (CEOs) in these organization indicating that the labour minister, labour secretary, the central PF commissioner and Director General of ESIC may not be by default the head of such organizations.
It means, the EPFO may become a more structured national body with its entire Rs. 11 trillion corpus under the responsibility of a central government-appointed chairman. Currently EPFO is headed by the labour minister chaired central board of trustees.
“The Central Government shall also appoint a Financial Advisor and Chief Accounts Officer to assist the Chief Executive Officer in the discharge of his duties,” draft code said. “The Central Board shall be a body corporate, having perpetual succession…”


3) Benefits for Gig Workers:
Millions of gig workforce in India, often referred as lonely in the workplace, may soon get life and disability insurance, health and maternity benefits among others as the union government is formulating a labour code that propose such provisions.
As per the draft social security code, the “Central Government may formulate and notify, from time to time, suitable social security schemes for gig workers and platform workers” and such schemes would encompass issues like “life and disability cover”, “health and maternity benefits” , “old age protection” and “any other benefit as may be determined by the Central Government”.Though the exact number of gig workers are unknown as they are still figuring out whether they are formal workers or informal workers or independent entrepreneurs, a 2017 study by consulting firm EY has said that nearly one out four gig workers in the world are from India. The draft proposal comes as California on Wednesday approved a law for wage benefit and protection for gig workers such as those working in taxi aggregating companies like Uber and Lyft. Like Ola in India, Lyft is a popular tax aggregator in the US.


4) Maternity Benfit:
The draft says subject to the other provisions of this Code, every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence, that is to say, the period immediately preceding the day of her delivery, and any period immediately following that day.For the purposes of this sub-section, ―the average daily wage means the average of the woman’s wages payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity, subject to the minimum rate of wage fixed or revised under the Code on Wages, 2019.


5) Existing labour laws that the code will merge:
The Code on Social Security, 2019 once in place will merge eight exiting labour laws including *Employees’ Compensation Act, 1923; Employees‘ State Insurance Act, 1948, Employees‘ Provident Funds and Miscellaneous Provisions Act, 1952; Maternity Benefit Act, 1961; Payment of Gratuity Act, 1972; Cine Workers Welfare Fund Act, 1981; Building and Other Construction Workers Cess Act, 1996 and Unorganized Workers‘ Social Security Act, 2018.

Know the Benefits of Registered Taxpayers Due to New GST Laws. Updated on September 13, 2019

Sudheendra Kumar
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Know the Benefits of Registered Taxpayers Due to New GST Laws. Updated on September 13, 2019

Know the Benefits of Registered Taxpayers Due to New GST Laws
Updated on September 13, 2019

Several changes have been made to the CGST Act, which will benefit the taxpayers in terms of ensuring compliance. The recent update in the different sections of the CSGT Act is related to the tax payments and interest, which will ease out the process of GST return filing for taxpayers. It will also reduce the interest burden from taxpayers.

Here are some of the major amendments that have been made under the CGST Act and how it will benefit the registered taxpayers:

For suppliers of goods, the threshold limit for GST registration has been increased to INR 40 lakh from INR 20 lakh. This change in threshold limit has been suggested by the GST Council during its 32nd meeting, which has now been approved by the Parliament and amended in the CGST act under section 22. Due to this new amendment, the small and medium scale suppliers will be benefited the most. Now, such small suppliers will be able to avoid paying high taxes thanks to the higher tax exemption limit.

Although this higher tax exemption will only be applicable to the supplier of goods. For suppliers in other sections or those selling goods as an e-commerce operation, registration under GST would still be mandatory for inter-state supplies.

For matters related to GST registration, a new subsection has also been added under section 25, that describes the entire registration process. Aadhar authentication for all GST-registered taxpayers, including the first-timers, has also been made mandatory by the government. The registration allocated to a particular person will stand invalid if he/she has not done Aadhaar authentication. This government decision also shows its intention to make Aadhar as a common proof of authentication across all the legal departments.

The best news for taxpayers is that now they will also be able to move their wrongly paid taxes to the correct head as per the latest rectification to section 49 of the CGST Act. In the past, the inability to move wrong paid taxes has made taxpayers hassled a lot, as they were required to pay those taxes again. Now, with this new update, any amount, i.e., taxes, interest, penalties or fee update in electronic cash ledger can be transferred to correct head under IGST, CGST or SGST/UTGST

Another decision that will particularly benefit the registered taxpayers a lot include a reduction in the interest amount levied on taxpayers due to late payment of taxes. Now, with the amendments in section 50 related to interest provisions, taxpayers will only have to pay interest only on that amount of tax which has been paid by debiting the electronic cash ledger. In simple words, the tax amount which has been paid using cash.

Earlier, the taxpayers were bound to pay interest on the entire portion of the tax that was unpaid beyond the due date. This was also inclusive of the input tax credit, which has been critiqued to be unfair or against the established practices by tax experts. Now, the rectification will help taxpayers avoid higher interest burden on them, and even nil interest burden in case of GST payment done utilizing input tax credit.

A new subsection under section 10, which governs the composition scheme has also been added to include the Service Providers under the ploy of this scheme. All Service Providers, having an annual turnover of up to INR 50 lakh and mixed suppliers (supplier of both goods & services) are now also allowed to be a part of the GST composition scheme. This amendment also makes compliance easier for small businesses in terms of filing their returns and maintenance of books of accounts.

Under the revision of CGST Act, a new option for return filing has also been introduced for the specified taxpayers. This return filing option now allows the specified taxpayers to file quarterly returns, unlike the monthly ones applicable earlier. The people option for quarterly returns would still require to make monthly tax payments. Similarly, for composition taxpayers, they need to make tax payments on a quarterly basis while return filing needs to be done annually. This will benefit the small taxpayers in terms of reducing the filing burden and reducing the GST cost associated with it.

The recent changes in the CGST Act also give an indication of the Indian government initiative of moving towards a cashless economy. A new section, namely 31A added in the CSGT Act is a clear reflection of this initiative. This new section added in the CGST Act mandates certain specified suppliers to give the prescribed mode of electronic payments to their recipients. This has been done to curb the usage of cash and to prevent tax evasion, a major problem faced by taxmen today.

In order to stop suppliers from claiming the undeserved benefits under input tax credit and not transferring this benefit to end customers in the form of reduced goods or service prices, the National Anti-profiteering Authority – constituted under section 171 has been formed, which can now force penalty up to 10 per cent on suppliers engaged in such malpractices. This amendment has also been made keeping the end customers in mind, and to pull chains around suppliers engaged in such unethical behaviour.

In conclusion, it can be easily said that the recent amendments made under GST have several welcome moves for the registered taxpayers. It is also anticipated that the journey of GST 2.0 will be easier for everyone, including taxpayers and taxmen, with a more simplified tax approach.

We are looking for Investment in a Listed Housing Loan company

Sudheendra Kumar
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We are looking for Investment in a Listed Housing Loan company

A fast growing Housing Loan Company , Listed in Bombay Stock Exchange looking for Investment of about INR 15 -30 Crores to augment their Loan portfolio.

Investors will be entitled to get a percentage stake in the Company based on Valuation as per SEBI Formula as it is a listed company and also Board position.

Current market cap is about Rs.75 Crores and Loan portfolio is about Rs.250 Crores.

It has an NPA below 4 per cent and approved by NHB for reference facilities.

Interested investors may call or WhatsApp on 98200-88394 for further information and discussion.

Team- Intellex

FOLLOW THRESHOLD LIMIT OF TAX AUDIT ASSIGNMENTS STRICTLY

Sudheendra Kumar
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FOLLOW THRESHOLD LIMIT OF TAX AUDIT ASSIGNMENTS STRICTLY

As per Chapter VI of Council General Guidelines, 2008 (Tax Audit Assignments under Section 44AB of the Income Tax Act, 1961), CA in practice shall not accept, in a FY, more than 60 of tax audit assignments as prescribed under Section 44AB of the Income Tax Act, 1961.

In case of firm of Chartered Accountants in practice, 60 tax audit assignments per partner of the firm, in a FY. Therefore, if there are 10 partners in a firm of Chartered Accountants in practice, then all the partners of the firm can collectively sign 600 tax audit reports. This maximum limit of 600 tax audit assignments may be distributed between the partners in any manner whatsoever.

For instance, 1 partner can individually sign 600 tax audit reports in case remaining 9 partners are not signing any tax audit report.

The maximum number of tax audits that can be undertaken by a CA is limited to 60. Request to members to follow limit Strictly. In UDIN regime, ICAI have data readily and may issue notices.

Note: Audits conducted under Section 44AD, 44ADA and 44AE of the Incometax Act, 1961 shall not be taken into account for the purpose of reckoning the limit of 60

Key Highlights of GST Notifications applicable form 01-Oct-2019

Sudheendra Kumar
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Key Highlights of GST Notifications applicable form 01-Oct-2019

Key Highlights of GST Notifications applicable form 01-Oct-2019

1. Reverse charge

a. Renting of Motor vehicle Services provided by way of renting of a motor vehicle provided to a body corporate by any person other than a body corporate, paying central tax at the rate of 2.5% on renting of motor vehicles with input tax credit only of input service in the same line of business.

b. In case of Builder Now, reverse charge will be applicable on the goods Cement supplied by unregistered supplier to promoter without any condition or limit. Government has widened the applicability of reverse charge on cement supplied by unregistered supplier to promoters.

  1. Government has notified that special procedure prescribed for payment of taxes in case of supply of development right services shall not be applicable and will be rescinded for development right services supplied on or after April 1, 2019 –
  2. Manufacturers of aerated water would not be able to opt for composition scheme
  3. List of New Exemptions
    A. Supplies of Silver and Platinum by nominated agencies to registered persons under the Scheme for “Export against Supply by Nominated Agency”
    B. All goods supplied to Food & Agricultural Organization of the United Nations (FAO) for execution of specified projects
    C. Services provided by and to Fédération Internationale de Football Association (FIFA)
    D. Services by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, coffee and tea

5. Major change in rates
Goods
Marine Fuel 0.5% will be at 5%
Wet grinder consisting of stone as a grinder will be at 5%
Woven and Non- Woven Bags and sacks of Polyethylene Polypropylene strips,whether laminated or not will be at 12%
Parts of railway or tramway locomotives, wagons, coaches, etc., classified under tariff heading 8601 to 8608 will be at 12%
Caffeinated Beverages will be at 28%

  1. New Rates for accommodation, restaurant and other services
    A. ‘Hotel accommodation’ having value of supply of a unit of accommodation above Rs. 1,000 but less than or equal to Rs.7,500 per unit per day or equivalent will be at 12%
    B. Restaurant services other than at ‘Specified premises’, will be at 5% ITC charged on goods and services used in supplying the service has not been taken
    C. Outdoor Catering or Composite supply of ‘outdoor catering’ together with renting of premises or supply of ‘outdoor catering’, at premises other than ‘specified premises’ provided by any person except-
    (a) suppliers providing ‘hotel accommodation’ at ‘specified premises’, or
    (b) suppliers located inv‘specified premises’ will be at 5%
    ITC charged on goods and services used in supplying the service has not been taken

D. Other professional, technical and business services relating to exploration, mining or drilling of petroleum crude or natural gas or both will be at 12%

E. Services by way of job work in relation to diamonds falling under chapter 71 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975) will be at 1.5%

F. Services by way of job work in relation to bus body building will be at 18%

G. Services by way of job work other than mentioned in the E and F will be at 12%

Mandatory compliances of Private Limited Company:

Sudheendra Kumar
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Mandatory compliances of Private Limited Company:

Mandatory compliances of Private Limited Company:

  1. Company Name Board- Every Company shall paint or affix the name and address of registered office and keep the same painted/affixed, outside every office or place in which its business is carried on, in legible letters.
  2. Letter Head of Company- Every Company shall get its name, address of registered office, CIN, telephone and email printed on all business letters, billheads, letter papers, notices and other official publications.
  3. First Board Meeting- First Meeting of Board of Directors is required to be held within 30 days of Incorporation of Company. Notice of BM must be send to every director at least 7 days before the meeting.
  4. Subsequent Board Meetings- Minimum 4 Board Meetings to be held every year with not more than 120 days gap between two meetings. In case of small company, it is sufficient to conduct only two Board Meetings.
  5. Issuing of Share Certificate – Company is required to issue Share Certificates to the subscribers of memorandum within 60 days of Incorporation of Company.
  6. Filing of Disclosure of interest by Directors- Every director at:
    ‐ First meeting in which he participates as director; or
    ‐ First meeting of Board in every FY; or
    ‐ Whenever there is change in disclosures

shall disclose in Form MBP‐1 (along with list of relatives and concern of relatives in the Company as per RPT definition), his concern or interest in any company, body corporate, firm or other association of individuals (including shareholding interest).
Form MBP‐1 shall be kept in the records of the company.

  1. Resident Director- Every Company is required to appoint at least one Director who has stayed in India for a total period of not less than 182 days in the previous calendar year.
  2. Alteration in MOA and AOA- Every alteration of Articles and Memorandum shall be filed with Registrar together with copy of altered Articles, notice of meeting and SR within 30 days of passing Special Resolution. Every alteration made in MOA and AOA shall be noted in every copy thereof.
  3. Registers- Every Company shall keep and maintain following Registers in the specified format:

‐ Register of Members MGT-1
‐ Register of other Security Holders residing outside India MGT-3
– Register of Transfer and Transmission of Shares SH-6
– Register of Charge CHG-7
‐ Index of the Registers

  1. Other Registers- Every Company shall keep at its Registered Office, a Register of Directors and KMP in the prescribed format containing prescribed particulars.
  2. Resolution- Copy of every resolution (with explanatory statement, if any) or Agreement for the specified matters to be filed with ROC in Form MGT‐14 within 30 days. Articles of Company shall have copy of resolution effecting amendment in AOA and Agreements referred in Section 117(3) of the Act.
  3. Minutes of Meeting- Minutes of every general meeting, Creditors, Board and Committee shall be prepared and kept within 30 days of conclusion of every meeting concerned. All appointments in the meeting shall be included in the minutes. Minutes of each meeting shall be entered into Minutes Book along with date of such entry.
  4. Appointment of Director- Every person to be appointed as Director shall provide his consent in Form DIR‐2 and such consent shall be filed by the Company with ROC in Form DIR‐12, within 30 Days of appointment.
  5. Provisions related to DIN- Every individual intending to be appointed as director shall make an electronic application in Form DIR-3 to Central Government for allotment of DIN.
  6. Qualification of Director- Declaration from Director at the time of appointment or reappointment in Form DIR‐8 .Annual disclosure from Director to be taken.
  7. Number of Directorship- No person shall be a director in more than 20 companies. Maximum number of public companies can be 10 (Director in Section-8 Co. and Dormant Director not to be included)
  8. Resignation by Director- Director shall intimate his resignation to the Company, which the Company shall file with ROC in Form DIR‐12 in 30 days. Company shall put resignation details on its website and in its Directors’ Report.
  9. Return of Director and KMP- Return of Directors and KMP to be filed with ROC in Form DIR 12, within 30 days of appointment or change.
  10. Meeting at shorter notice- Meeting can be convened on a shorter notice for urgent matters. Consent from not less than 95% of members entitled to vote thereat.
  11. Quorum‐ Quorum shall be one‐third or two directors, whichever is higher. Directors participating through Video Conferencing shall be counted for the purpose of quorum.
  12. First Auditor- First Auditor of the company shall be appointed by the BOD within 30 days of Incorporation who shall hold the office till the conclusion of 1st AGM. In case of First Auditor, filing of ADT-1 is not mandatory.
  13. Subsequent Auditor- The BOD shall appoint the auditor in first AGM of company who shall hold the office till the conclusion of 6th AGM and shall inform the same to ROC by filing ADT-1. The responsibility to file Form ADT 1 is that of the company and not of the auditor within 15 days from the date of appointment.
  14. Ratification of Auditor- Shareholders will ratify the appointment of Auditor in every AGM but there is no need to file ADT-1 for ratification.
  15. Casual Vacancy of Auditor- If Casual Vacancy is arising due to the resignation of auditor, it shall be filled within 30 days of BOD meeting, subject to approval in General Meeting (AGM or EGM). Any auditor appointed in a Casual Vacancy shall hold office until the conclusion of the next Annual General Meeting.
  16. ADT-3- The auditor shall file with the company a resignation letter stating the reason for resigning and file Form ADT-3 with the registrar within 30 days from the date of resignation. Filing form ADT-3 is the responsibility of the auditor and can only be filed if ADT-1 of the relevant auditor was filed.
  17. Annual General Meeting- Every Company is required to hold an Annual General Meeting on or before 30th September every year during business hours (9 am to 6pm), on a day that is not a public holiday and either at the registered office of the Company or within the city, town or village where the registered office is situated. A 21 clear days’ notice is required to be given for the same.
  18. Filing of Financial Statements- Every Company is required to file its Financial Statements within 30 days of its Annual General Meeting with Registrar of Company in E-Form AOC-4. The same shall be digitally signed by one director and certified by CA/CS/Cost Accountant in Practice.
  19. Filing of Annual Return- Every company is required to file its Annual Return with Registrar of Companies within 60 days of Annual General Meeting in E-Form MGT-7. A company having turnover of INR 50 Crore or more shall be certified by a Practicing CS in Form MGT-8.
  20. Regularisation of Additional Director- If company wants to appoint additional director as director, then it shall regularize the person as director in General Meeting by passing Shareholder Resolution. File form DIR-12 for Change in Designation of Director along with ordinary resolution within 30 days of AGM.
  21. Directors’ Report- Directors’ Report is to be filed within 30 days of AGM along with Form AOC-4. It should be signed by the “Chairperson” authorized by the Board, where he is not so authorized by at least 2 Directors.
  22. Filing of Financial Statements of a Foreign Co. -Every Foreign Company is required to file Annual accounts (consolidated financial statements/ global accounts) along with the list of all principal places of business in India within 6 months of close of the Financial Year.
  23. Filing of Annual Return of a Foreign Co.- Every foreign company shall prepare and file annual return of the company in e-Form FC-4 within 60 days from the close of financial year.

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