Private Limited Company: The 5 Compliance Rules Every Bangalore Founder Must Know

Private Limited Company is the ideal structure for Growth Stage business. Allows fundraising, ESOPs and limited liability.

But here’s what founders miss: The compliance clock starts ticking the day you incorporate.

Penalties for missed deadlines. It can make you ineligible as a director.

Let's go through the five rules that keep your company compliant – and your founder status intact.

Rule 1: INC-20A to be Filed Within 180 Days

Form INC-20A (Declaration of Commencement of Business) – To be filed within 180 days of incorporation.

Miss this and your company can't legally operate, enter into contracts or borrow money. Late filing penalties are Rs. 5,000 and above.

Action: Set a reminder on day 150. File now.

Rule 2: Have 4 Board Meetings Per Year

The Companies Act requires a minimum of 4 meetings of the board in a year.

Maximum time between meetings : 120 days

First board meeting: Within 30 days of incorporation

Minutes must be prepared in writing for each meeting.

Non-compliance penalty: ₹25,000-₹5,00,000 for company + liability on directors.

Action: Schedule all 4 meetings at the start of each financial year.

Rule 3: AOC-4 & MGT-7 Must be Filed Prior to Deadlines

Your two most important annual filings are:

Form What It Is When Due

AOC-4 Financial statements (balance sheet + profit & loss)30 days from AGM (by 30th Oct)

MGT-7 Annual Return (Shareholding, Directors, Meeting)Within 60 days of AGM (by 29 Nov)

The pain: Rs.100 a day to the company, AND Rs.100 a day for each director.

Delay of 90 days for 2 directors: Rs. 54,000.

Action: File within 7 days of receipt of audited financials. DON'T WAIT FOR THE DEADLINE.

Rule 4: Submit DIR-3 KYC by 30 September

Every director has to file Form DIR-3 KYC every year before 30th September.

This confirms that your Director Identification Number (DIN) is active.

Miss it: DIN turns into “Deactivated.” The cost of reactivating is Rs. 5000 per director and it takes 2-3 weeks.

Action: August DIR-3 KYC filing. Don’t wait until September.

Rule 5: Filing of Income Tax Return (ITR-6) by 31st October

Private Limited Companies need to file ITR-6 before 31 October (If tax audit required) or 31 July (If no audit required).

Consequences of late filing:

• Interest on unpaid tax @ 1% per month
• Late filing fees : Rs. 5,000-10,000
• Some losses cannot be carried forward

Action: Wrap books May. Tax audit will start by June. File by September