Compliance under Companies Act 2013 is not a one-time exercise. It is a continuous legal obligation that runs from the date of incorporation through every financial year for as long as the company remains registered. Most founders understand this in theory. In practice, annual returns pile up, board meetings go unrecorded, auditors are not formally appointed on time, and DINs lapse because DIR-3 KYC is not filed.
A co-founder of a Bengaluru software company discovered this cost the hard way. Over three consecutive financial years, his company had not filed Form MGT-7 or Form AOC-4 with the Registrar of Companies. He had been busy building the product and managing clients. When the company received a Series A term sheet and the investor ran due diligence, the MCA records showed three years of non-filing. Under Section 164(2)(a) of the Companies Act, 2013, every director was automatically disqualified from directing any company for five years. The investment was paused. Resolving the disqualification required NCLT proceedings and months of legal work.
This guide covers every component of compliance under the Companies Act 2013 applicable to a Private Limited Company in 2026: post-incorporation one-time obligations, annual recurring filings, event-based filings, penalties, small company concessions, and the 2026 updates including the Companies Compliance Facilitation Scheme and the Corporate Laws (Amendment) Bill. Understanding Compliance Under Companies Act 2013 from the first year itself prevents costly penalties and director disqualifications later.
What Compliance Under Companies Act 2013 Involves
Compliance under Companies Act 2013 covers three categories of obligations. The first is post-incorporation compliance: a fixed set of tasks that must be completed within defined windows immediately after the company is formed. The second is annual compliance: recurring filings, meetings, and disclosures that must be completed every financial year regardless of the company’s turnover, revenue, or activity level. The third is event-based compliance: filings triggered by specific corporate events such as director changes, charge creation, share allotment, or resolution passing.
Every Private Limited Company registered in India, whether actively operating, dormant, or loss-making, must comply with all three categories. Zero-revenue companies must file annual returns and financial statements. Inactive companies must hold board meetings and maintain statutory registers. There is no exemption based on turnover, profitability, or inactivity, except for the concessions available to small companies as defined under Section 2(85) of the Act.
All filings are made electronically on the MCA portal at https://www.mca.gov.in using Digital Signature Certificates of the authorised director.
Post-Incorporation Compliance: One-Time Obligations
INC-20A: Commencement of Business Declaration
Form INC-20A must be filed within 180 days of incorporation under Section 10A of the Companies Act, 2013. It declares that all subscribers to the Memorandum of Association have paid the agreed value of their shares, and provides bank proof of the deposited subscription money. Without this filing, the company cannot commence business, exercise borrowing powers, or enter into financial transactions freely. Penalty for non-filing: Rs. 50,000 on the company and Rs. 1,000 per day on each director in default.
First Auditor Appointment: Form ADT-1
The Board of Directors must appoint the first statutory auditor within 30 days of incorporation under Section 139(6) of the Companies Act, 2013. Form ADT-1 must be filed with the ROC within 15 days of the board resolution appointing the auditor. The first auditor holds office until the first Annual General Meeting. Subsequent auditors are appointed for five-year terms at the AGM.
Director Interest Disclosure: Form MBP-1
At the first board meeting and at the first board meeting of every financial year thereafter, each director must disclose their concern or interest in any company, firm, or other association under Section 184 of the Companies Act, 2013. The disclosure is made in Form MBP-1 and recorded in the minutes. Failure to disclose renders any contract in which the director has an undisclosed interest voidable at the option of the company.
Annual Compliance Under Companies Act 2013
Annual compliance under Companies Act 2013 follows the financial year cycle of April 1 to March 31. Annual filings form the core of Compliance Under Companies Act 2013 for every private limited company. The key annual obligations are described below.
Board Meetings: Section 173
Every Private Limited Company must hold a minimum of four board meetings in each calendar year, with no gap exceeding 120 days between two consecutive meetings. The first board meeting must be held within 30 days of incorporation. Notice of each board meeting must be issued at least seven days in advance to every director at their registered address, in accordance with Section 173 and Secretarial Standard SS-1.
Each board meeting requires a quorum of one-third of total directors or two directors, whichever is higher. Minutes of every board meeting must be recorded in the minutes book within 30 days of the meeting. Small companies and One Person Companies are required to hold only two board meetings per year with a gap of not more than 90 days.
Annual General Meeting: Section 96
Every Private Limited Company must hold an Annual General Meeting each financial year within six months from the close of the financial year, meaning by September 30 for a March 31 financial year end. The first AGM may be held within nine months from the close of the first financial year. The time gap between two consecutive AGMs must not exceed 15 months.
The AGM notice must be sent to all members at least 21 clear days before the meeting under Section 101. Shorter notice is valid if at least 95% of members entitled to vote agree in writing. The AGM approves the audited financial statements, appoints or re-appoints auditors, declares dividends if any, and transacts any other business specified in the agenda.
Financial Statements: Form AOC-4
Under Section 137 of the Companies Act, 2013, audited financial statements must be filed with the ROC within 30 days of the AGM in Form AOC-4. The financial statements include the Balance Sheet, Statement of Profit and Loss, Cash Flow Statement (for companies above the small company threshold), notes to accounts, and the Board’s Report under Section 134.
In 2026, the MCA updated the AOC-4 form in MCA V3. Directors’ Report, AOC-1, and AOC-2 are now integrated as linked forms rather than separate PDF annexures. Previous year’s Balance Sheet and P&L figures are prefilled, and any changes require mandatory explanation. Form CSR-2 must be linked where CSR obligations apply.
Late filing penalty: Rs. 100 per day with no upper cap. Non-filing for three consecutive years triggers director disqualification under Section 164(2)(a).
Annual Return: Form MGT-7
Under Section 92 of the Companies Act, 2013, the Annual Return must be filed within 60 days of the AGM in Form MGT-7. The Annual Return discloses the company’s registered address, principal place of business, number of members and debenture holders, indebtedness, details of share capital and shares, changes in directors and key managerial personnel, and details of significant shareholders.
Small companies and One Person Companies file the simplified Form MGT-7A, which does not require Company Secretary certification. Other companies must file the full MGT-7, certified by a practising Company Secretary for companies with paid-up capital above Rs. 10 crore or turnover above Rs. 50 crore.
Late filing penalty: Rs. 100 per day with no upper cap. Non-filing for three consecutive years leads to automatic director disqualification for five years under Section 164(2)(a). Over three lakh directors in India have faced this disqualification as of 2025.
Statutory Audit
Every company registered under the Companies Act, 2013 must get its books of accounts audited by a practising Chartered Accountant or CA firm. The statutory audit examines whether the financial statements give a true and fair view and comply with applicable accounting standards. The auditor’s report is mandatory for filing AOC-4.
Auditor rotation is mandatory for all Private Limited Companies. An individual auditor can hold office for a maximum of five consecutive years. An audit firm can hold office for a maximum of ten consecutive years, subject to applicable rotation rules.
DIR-3 KYC: Annual Director Verification
Every director holding a DIN must file Form DIR-3 KYC or DIR-3 KYC-WEB to keep the DIN active. Annual DIR-3 KYC must be filed by September 30 of each year. Failure to file results in the DIN being deactivated. A deactivated DIN prevents any MCA filings. Reactivation requires filing DIR-3 KYC with a late fee of Rs. 5,000.
Event-Based Compliance Under Companies Act 2013
Compliance under Companies Act 2013 also includes filings triggered by specific corporate events:
DIR-12 (Changes in Directors): Within 30 days of director appointment, resignation, or change in designation. Attachments: consent letter of new director, resignation letter, board resolution.
MGT-14 (Filing of Resolutions): Special and board resolutions on name change, capital alteration, share issuance, and inter-corporate investments under Section 186 must be filed within 30 days. Filing fee: Rs. 200 to Rs. 5,000.
CHG-1 (Creation of Charge): Filed within 30 days of charge creation under Section 77. Late filing: Rs. 500 per day up to 300 days, after which NCLT order is required.
PAS-3 (Return of Allotment): Within 30 days of share allotment under Section 39.
SH-7 (Change in Authorized Capital): Within 30 days of passing the special resolution.
INC-22 (Change in Registered Office): Within 30 days of address change.
Penalties for Non-Compliance Under Companies Act 2013
Late filing of AOC-4 or MGT-7 attracts Rs. 100 per day per form with no cap. Missing both forms for 200 days costs Rs. 40,000. Missing the AGM deadline attracts up to Rs. 1,00,000 on the company and Rs. 1,00,000 on each defaulting officer.
Three consecutive years of MGT-7 or AOC-4 non-filing leads to automatic director disqualification for five years under Section 164(2)(a), reversible only through NCLT. Non-registration of a charge within the prescribed time renders it void against liquidators and other creditors.
Small Company Compliance Concessions (2026)
The definition of a small company under Section 2(85) of the Companies Act, 2013 was updated by a notification in December 2025 to: paid-up share capital not exceeding Rs. 10 crore AND turnover not exceeding Rs. 100 crore. Small companies receive the following concessions:
Two board meetings per year instead of four, with a gap of not more than 90 days between meetings. Simplified MGT-7A filing instead of full MGT-7. No Audit Committee required under Section 177. No mandatory Secretarial Audit. No mandatory Cash Flow Statement. Board’s Report in simplified format. No requirement for Company Secretary certification on MGT-7A.
These concessions substantially reduce the compliance cost for eligible small companies.
2026 Updates Affecting Compliance Under Companies Act 2013
Companies Compliance Facilitation Scheme 2026 (CCFS 2026): Running from April 15 to July 15, 2026, CCFS 2026 allows companies to file pending AOC-4, MGT-7, and MGT-7A forms with a 90% waiver on accumulated additional fees. Companies pay normal filing fees plus only 10% of the applicable additional fees. This is a significant relief for companies with multiple years of pending filings. Companies against whom Section 248 strike-off notice has been issued are not eligible.
Corporate Laws (Amendment) Bill, 2026: Introduced in Lok Sabha in March 2026, this Bill proposes: AGMs via video conferencing with at least one physical meeting every three years; recognition of Restricted Stock Units (RSUs) and Stock Appreciation Rights (SARs) alongside traditional ESOPs; and reduction of merger approval thresholds from 90% to 75%.
Income Tax Act 2025: Replaces the Income Tax Act, 1961 from Financial Year 2026-27. All section references in compliance workflows, including advance tax and TDS provisions linked to company compliance, will change.
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Conclusion
Compliance under Companies Act 2013 is mandatory for every Private Limited Company regardless of turnover, activity level, or size. It covers post-incorporation obligations (INC-20A within 180 days, ADT-1 within 30 days), annual recurring obligations (four board meetings, AGM by September 30, AOC-4 within 30 days of AGM, MGT-7 within 60 days of AGM, statutory audit, DIR-3 KYC by September 30), and event-based obligations (DIR-12, MGT-14, CHG-1, PAS-3, and others within 30 days of the event).
Late filing attracts Rs. 100 per day per form with no cap. Three years of non-compliance leads to director disqualification for five years under Section 164(2)(a). The Companies Compliance Facilitation Scheme 2026 (CCFS 2026), running from April 15 to July 15, 2026, provides a 90% waiver on accumulated additional fees for companies with pending filings.
The Corporate Laws (Amendment) Bill, 2026 proposes AGM flexibility via video conferencing, RSU and SAR recognition, and reduced merger thresholds, signalling continued evolution of the compliance framework. The Income Tax Act 2025 transition from FY 2026-27 will require all section references to be updated.
Compliance under Companies Act 2013 is not a cost of doing business. It is the structural foundation that keeps the company and its directors legally protected.
Frequently Asked Questions
1. What are the key annual compliances under Companies Act 2013?
The key annual compliances are: minimum four board meetings per year (two for small companies), AGM within six months of financial year end, Form AOC-4 (financial statements) within 30 days of AGM, Form MGT-7 (annual return) within 60 days of AGM, statutory audit, and DIR-3 KYC filing by September 30.
2. What happens if a company does not file MGT-7 or AOC-4 for three consecutive years?
Under Section 164(2)(a) of the Companies Act, 2013, every director of the defaulting company is automatically disqualified from acting as a director of any company for five years. This disqualification cannot be reversed without NCLT proceedings.
3. What is the penalty for late filing of AOC-4 and MGT-7?
Late filing attracts Rs. 100 per day per form with no upper cap. Filing both forms 200 days late would attract Rs. 40,000 in additional fees (Rs. 20,000 per form). The CCFS 2026 scheme (April 15 to July 15, 2026) waives 90% of accumulated additional fees.
4. What is the small company definition under the Companies Act 2013 in 2026?
Under a December 2025 notification, a small company is one with paid-up capital not exceeding Rs. 10 crore AND turnover not exceeding Rs. 100 crore. Small companies get concessions including two board meetings per year, simplified MGT-7A, and no mandatory Audit Committee.
5. What is the CCFS 2026 and who is eligible?
The Companies Compliance Facilitation Scheme 2026 runs from April 15 to July 15, 2026. Eligible companies can file pending AOC-4 and MGT-7/MGT-7A forms paying normal fees plus only 10% of the applicable additional fees, a 90% waiver. Companies against whom a final Section 248 strike-off notice has been issued are not eligible.
6. How many board meetings must a Private Limited Company hold per year?
Under Section 173 of the Companies Act, 2013, a minimum of four board meetings must be held per year, with no gap exceeding 120 days between two consecutive meetings. Small companies and OPCs are required to hold only two meetings per year with a gap not exceeding 90 days.
7. What is Form DIR-3 KYC and what happens if it is not filed?
DIR-3 KYC is an annual filing that verifies a director’s identity and contact details with the MCA. It must be filed by September 30 each year. If not filed, the director’s DIN is deactivated, preventing all MCA filings. Reactivation requires filing DIR-3 KYC with a late fee of Rs. 5,000.
8. What is the Corporate Laws (Amendment) Bill, 2026 and what does it change?
The Bill was introduced in Lok Sabha in March 2026. It proposes allowing AGMs via video conferencing (with one physical meeting at least once every three years), recognising Restricted Stock Units and Stock Appreciation Rights alongside ESOPs, and reducing merger approval thresholds from 90% to 75%. These provisions are not yet gazetted; monitor the MCA portal for final notifications.
