Private Limited Compliance Checklist

PRIVATE LIMITED COMPLIANCE

CHECKLIST
This document is a checklist of compliance points for
the registration of a private limited company.

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Private Limited Compliance Checklist

INTRODUCTION

Staying compliant with the law of land is basic hygiene required to run any business. In fact, without
certain mandatory registrations, a business is not ready for operations. Once a company is duly registered,
it is expected to file regular returns with several authorities based on the type of business the company is
running, the state and scale of its operations.
As we write this document in September 2017, we have seen major reforms in existing laws and the
introduction of new laws like Goods and Services Tax (GST). With proposed changes in recent labor laws
along with the introduction of online filings, we expect the laws to be further simplified to bring about
transparency and ease of doing business.
This document is an introduction to a first time entrepreneur, to outline an overall landscape of
compliances required to kick-start a business. Since the topic of compliance is, important, complicated and
evolving, we strongly recommend that you as a first-time entrepreneur, hire services of a professional
Chartered Accountant (CA) or Company Secretary (CS), for support and guidance on registration, and
everyday compliance.
We have presented this document as a checklist for you to stay informed about the topic and to ask the
right questions about compliance.

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Private Limited Compliance Checklist

CHECKLIST OF REGISTRATIONS

There are two types of compliances to keep in mind – one-time registrations to register your business and
periodic compliance activities throughout the life of the business:

ONE-TIME REGISTRATIONS:

ENTITY REGISTRATIONS
1. Under Companies Act –Registrar of Companies (ROC), Ministry of Corporate Affairs
(MCA). For more details, please refer to the Company Incorporation Document.
2. With Tax Authorities – Permanent Account Number (PAN), Tax Deduction Number
(TAN).
3. Under GST Act – Obtain GST registration for each state where the company registers
its office. GST returns such as GSTR 1, 2, 3 are to be filed before the 10th, 15th and 20th
of the next month.
4. Under Shops and Establishment Act – At the time of opening an office or branch
office in any state.
5. Under Labor Law – With Employee’s Provident Fund (PF), Employee State Insurance
(ESI), and Professional Tax (PT):
a. Registration under ESI Act when your team size grows to more than 9 people
and monthly salary is equal to or less than Rs 21,000.
b. Registration under EPF Act if your team size is above 19 people and monthly
wages as defined under the EPF Act is equal to less than Rs 15,000.

BUSINESS REGISTRATION :
Annual Recurring Revenue (ARR) comprises the various revenue sources that are accounted
for and measured against a startup. It cannot, however, include one-time fees.
1. ARR per customer: This is the revenue earned against every, single customer. It is split to
get a detailed growth structure. It indicates how every customer is performing - which
further highlights the overall business performance.
2. Monthly Recurring Revenue (MRR): This is where revenue is split to analyze the monthly
performance. Do note that one-time fees and bookings must be strictly kept away while
accounting here.

Some of the labor law registrations like Shops and Establishment are based on the number of
employees working and need to be renewed when the company grows and hires more
employees. For example, the company needs to register with EPF department once they cross a

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Private Limited Compliance Checklist

total strength of 19 employees. Professional Tax (PT) registration is applicable to select states in
India and is renewed annually.

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Private Limited Compliance Checklist

PERIODIC MANDATORY COMPLIANCE:

ROC/MCA
1. File appropriate forms with the ROC and the MCA.
2. Hold Quarterly Board Meeting, and at least one Shareholder’s meeting every year.
3. File Annual Reports with Audited Report, Financial Statements and Director’s report.
4. Report and file forms for Change in Directorship, Capital, Address, the opening of a branch
of the Company.
5. Maintain statutory registers required under the Companies Act. These registers would
have statutory details, such as, lists of members and their Share Ledger, Register of Share
Transfer, list of board meetings.

TAX DEPARTMENT :
1. Deduct tax monthly and deposit it with the Tax Authorities before the 7th of the
subsequent month.
2. Take care of Quarterly Tax Filings before the 31st of the month, next to the end of each
quarter.

Tips: Before making any payment, you have to estimate the annual amount to be paid to vendors
and contractors. The applicable TDS on vendors/contractors under U/s 194 C, if single payment
exceeds Rs. 30,000, or total payment during the year exceeds RS. 1, 00,000, is 1% for Individuals/
HUF and 2% for others. Also if PAN not available, TDS has to be deducted at the rate of 20%.
You need to deduct and deposit the TDS with the Income Tax Authorities, and remit only the
balance against invoices raised by the vendor/contractor.

LABOR LAW:
1. File returns of EPF and ESI monthly.
2. File PT monthly.
3. File Annual Returns.

Tips: One needs to stay updated for labor law compliance. Rules are different based on the state
and change periodically.

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Private Limited Compliance Checklist

CONCLUSION

Each registration and compliance has forms to be filled. While many of the forms are online and free of cost, most of
the filings with MCA have prescribed fees ranging from Rs 300 to a few thousand per form, based on Authorized
Capital of the Company. We suggest that, as a start-up, you keep your Authorized Capital as low as Rs 100,000,
unless you are on a fast track to raise venture funding. Authorized Capital can be increased when the capital of the
company grows.

We further suggest that you hire the services of a professional on a monthly basis for compliance requirements of
your company. Log on to http://my.wfnen.org/service-provider/ to choose from curated service providers.

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