Why Annual Compliance Matters
Every company registered in India, regardless of its size, revenue, or activity level, is required to meet a set of annual compliance obligations under the Companies Act 2013, the Income Tax Act 1961, and various other statutes. Non-compliance does not simply result in a fine. It can lead to director disqualification, striking off of the company from the register, and in serious cases, prosecution. For companies with foreign investment, the stakes are even higher because non-compliance can trigger FEMA penalties and complicate future investment rounds or exits.
This checklist is designed to be practical. It covers the core annual obligations that every Private Limited Company and LLP in India must fulfill, organized by category and timeline.
Board Meeting Requirements
Private Limited Companies must hold a minimum of four board meetings per year, with no more than 120 days between any two consecutive meetings. The first board meeting must be held within 30 days of incorporation.
Key Requirements
- Quorum: One-third of the total strength of the board or two directors, whichever is higher. At least one independent director (if applicable) must be present.
- Notice: A minimum of seven days' notice must be given to all directors. The notice can be sent via email, post, or hand delivery.
- Minutes: Minutes of each board meeting must be recorded and maintained. They should be entered in the Minutes Book within 15 days of the meeting and signed by the chairperson at the next meeting.
- Video Conferencing: Directors can participate via video conferencing, but certain matters (such as approval of financial statements) require physical presence of at least one director.
For LLPs, there is no statutory requirement to hold meetings, but it is considered best practice to document partner decisions through formal resolutions.
Annual General Meeting (AGM)
Every company must hold its AGM within six months from the end of its financial year. For most companies with a March 31 financial year, this means the AGM must be held by September 30. The first AGM must be held within nine months of the closing of the first financial year.
AGM Agenda Items
- Adoption of audited financial statements (Balance Sheet, Profit & Loss, Cash Flow Statement)
- Declaration of dividend (if any)
- Appointment or reappointment of auditors
- Appointment of directors retiring by rotation
- Any special business as mentioned in the notice
Notice and Quorum
A minimum of 21 clear days' notice must be given to all members. For Private Limited Companies, the quorum is two members present in person. The notice must include the date, time, venue, and agenda of the meeting along with explanatory statements for any special business.
ROC Filings: Annual Returns and Financial Statements
The Registrar of Companies (ROC) requires two major annual filings from every company:
AOC-4: Filing of Financial Statements
This form is used to file the company's Balance Sheet, Profit & Loss Account, Cash Flow Statement, and notes to accounts with the ROC. The filing must be done within 30 days of the AGM. For an OPC (One Person Company), the deadline is 180 days from the close of the financial year.
The financial statements must be audited by a Chartered Accountant and approved by the board before being presented at the AGM. Companies with a turnover exceeding INR 50 crore must also file their financial statements in XBRL format.
MGT-7/MGT-7A: Annual Return
The annual return provides a comprehensive snapshot of the company as on the date of the AGM. It includes details of shareholders, directors, share capital, indebtedness, and compliance status. MGT-7 must be filed within 60 days of the AGM. Small companies and OPCs can file the abridged version MGT-7A.
The annual return must be signed by a director and the company secretary (if appointed). Companies with a paid-up capital of INR 10 crore or more, or a turnover of INR 50 crore or more, must have the annual return certified by a Company Secretary in Practice.
Income Tax Compliance
Advance Tax
Companies must pay advance tax in four instalments during the financial year:
- June 15: At least 15% of estimated tax liability
- September 15: At least 45% of estimated tax liability (cumulative)
- December 15: At least 75% of estimated tax liability (cumulative)
- March 15: 100% of estimated tax liability
Failure to pay advance tax or shortfall in payment attracts interest under sections 234B and 234C of the Income Tax Act.
Income Tax Return
The corporate income tax return (ITR-6 for companies, ITR-5 for LLPs) must be filed by October 31 of the assessment year for companies that require a tax audit (turnover exceeding INR 1 crore, or INR 10 crore if digital transactions exceed 95%). For companies without a tax audit requirement, the deadline is July 31.
Tax Audit
Companies with turnover exceeding INR 1 crore (INR 10 crore with the digital transaction threshold) must get their accounts audited under section 44AB. The tax audit report must be filed by September 30 of the assessment year. A transfer pricing audit is additionally required if international or specified domestic transactions exceed INR 1 crore.
GST Compliance
Companies registered under GST must file regular returns:
- GSTR-1: Monthly or quarterly (under QRMP scheme) return of outward supplies, due by the 11th or 13th of the following month.
- GSTR-3B: Monthly or quarterly summary return with tax payment, due by the 20th of the following month (varies for quarterly filers).
- GSTR-9: Annual return, due by December 31 of the following financial year.
- GSTR-9C: GST audit reconciliation statement for taxpayers with turnover exceeding INR 5 crore, due with GSTR-9.
Statutory Audit
Every company must appoint a statutory auditor at its first AGM. The auditor holds office from the conclusion of one AGM to the conclusion of the sixth AGM (a term of five years). The appointment must be ratified at every subsequent AGM during this period.
The auditor must issue an audit report on the financial statements, which includes their opinion on whether the statements give a true and fair view of the company's financial position. For companies with a net worth of INR 250 crore or more, or a turnover of INR 750 crore or more, the audit report must also include a report on internal financial controls.
Director KYC (DIR-3 KYC)
Every individual holding a Director Identification Number (DIN) must file DIR-3 KYC by September 30 of every year. This is a personal filing obligation, not a company filing. If a director fails to file DIR-3 KYC, the DIN is deactivated, and the director cannot sign any filings until the KYC is completed. A penalty of INR 5,000 applies for late filing.
FEMA Compliance for Companies with Foreign Investment
Companies that have received foreign direct investment have additional annual obligations:
- Annual Return on Foreign Liabilities and Assets (FLA): Must be filed with the RBI by July 15 every year. This covers the company's foreign assets and liabilities as on March 31.
- FC-GPR Compliance: Any issuance of shares to foreign investors during the year must be reported through FC-GPR within 30 days of allotment.
- Annual Performance Report (APR): If the Indian company has made overseas investments, it must file an APR with the RBI by December 31.
- ECB Returns: If the company has raised external commercial borrowings, monthly ECB-2 returns must be filed with the RBI within seven days of the end of each month.
Other Key Compliance Deadlines
- TDS/TCS Returns: Quarterly returns due within 31 days of the end of each quarter (Form 24Q for salaries, 26Q for non-salary payments, 27Q for payments to non-residents).
- PF and ESI: Monthly contributions due by the 15th of the following month. Annual PF return due by April 30.
- Professional Tax: Monthly or annual filing depending on the state. Deadlines vary by state.
- IEC Renewal: Import-Export Code must be renewed annually between April and June by updating the IEC profile on the DGFT portal.
Penalties for Non-Compliance
The consequences of missing compliance deadlines are significant:
- Late filing of AOC-4 or MGT-7: INR 100 per day of delay, with no upper cap. For a filing that is six months late, the penalty would be approximately INR 18,000 per form.
- Failure to hold AGM: Penalty of INR 1 lakh on the company and INR 5,000 on each officer in default.
- Non-filing of DIR-3 KYC: DIN deactivation and INR 5,000 penalty.
- Income tax return late filing: Late fee of INR 5,000 (or INR 1,000 if total income is less than INR 5 lakh) plus interest on unpaid tax.
- Director disqualification: Directors of companies that fail to file annual returns or financial statements for three consecutive years are disqualified from being appointed as directors in any company for five years.
The most effective way to manage compliance is to maintain a compliance calendar and engage a qualified professional, whether a Chartered Accountant, Company Secretary, or a compliance management firm, to ensure nothing falls through the cracks.