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148 of the Act read with rule 4 of the Companies (Cost Records and Audit) Rules, 2014 and rule 14 of the Companies (Audit and Auditors) Rules, 2014 for cost audit applicability.
Introduction: Ensuring compliance is an integral part of managing a private company. The extent of compliance varies, and this guide provides a detailed breakdown based on factors such as paid-up capital, turnover, borrowings, and more. By understanding these specific compliance requirements, private companies can navigate the complex regulatory landscape effectively.
On the Basis of Paid-Up Share Capital:
1. 5 Cr and above:
- Compliances: Filing of Financial Statement through XBRL mode
- Relevant Section: 137(2)
- Relevant Rules: The Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015
- Time Period: Within 30 days of Annual General Meeting
2. 10 Cr and above:
- Compliances: Annual Return Certification (MGT-8)
- Relevant Section: 92(2)
- Relevant Rules: Rule 11(2) of the Companies (Management and Administration) Rules, 2014
- Time Period: Within 60 days of Annual General Meeting
- Additional Requirement: Appointment of Company Secretary (Within 6 months from the applicability of provisions or such vacancy)
3. 50 Cr and above:
- Compliances: Rotation of Auditor
- Relevant Section: 139(2)
- Relevant Rules: Rule 5 of the Companies (Audit and Auditors) Rules, 2014
- Time Period: Individual Auditor – One term of five years, Auditor’s firm – Two terms of five consecutive years
Note: Non-banking financial companies, housing finance companies, and companies engaged in banking and insurance sectors are exempted.
On the Basis of Turnover:
1. 50 Cr and above:
- Compliances: Annual Return Certification
- Relevant Section: 92(1)(k)
- Relevant Rules: Rule 11(2) of the Companies (Management and Administration) Rules, 2014
- Time Period: Within 60 days of Annual General Meeting
- Additional Requirement: Filing of Financial Statement through XBRL mode (Within 30 days of Annual General Meeting)
2. 100 Cr and above:
- Compliances: Filing of Financial Statement through XBRL model
- Relevant Section: 137(2)
- Relevant Rules: The Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015
- Time Period: Within 30 days of Annual General Meeting
3. 200 Cr and above:
- Compliances: Appointment of Internal Auditor
- Relevant Section: 138(1)
- Relevant Rules: Rule 3 of the Companies (Accounts) Rules, 2014
- Time Period: Within 6 months from the applicability of the Act/Rules
4. 250 Cr and above:
- Compliances: Comply with Indian Accounting Standards
- Relevant Section: 133 (Indian Accounting Standards) Rules, 2015
5. 500 Cr and above:
- Compliances: Constitution of Corporate Social Responsibility Committee
- Relevant Section: 135(1)
- Relevant Rules: The Companies (Corporate Social Responsibility Policy) Rules, 2014
- Time Period: As soon as the provisions of Act/Rules become applicable
On the Basis of Loans and Borrowings from Banks and PFIs:
Refer to specific sections and rules for detailed compliance requirements.
On the Basis of Outstanding Deposits:
Refer to specific sections and rules for detailed compliance requirements.
On the Basis of Net Profit:
Refer to specific sections and rules for detailed compliance requirements.
On the Basis of Net Worth:
Refer to specific sections and rules for detailed compliance requirements.
Conclusion: This comprehensive guide serves as a roadmap for private companies to navigate the intricate web of compliance requirements. By categorizing obligations based on paid-up capital, turnover, borrowings, and other factors, companies can proactively address their legal and regulatory responsibilities. Staying compliant not only ensures the company’s adherence to the law but also promotes transparency and ethical business practices.
