COMPLIANCE FOR PRIVATE LIMITED COMPANY, LLP & OPC – A CLEAR COMPARISON
The word “compliance” stands for the “act of obeying an order, rules, and request”. And the private limited company referred with the company which offers the limited shares. With the aspect of compliance for the private limited company which is considered as the most popular form of starting a business, the various compliance which are required to be followed once the business has been incorporated. Managing the various operations carefully, help any entrepreneur.
There are various compliances, which private limited company has to mandatory ensure with them as
- Statutory audit – which ensure whether an organisation is providing fair and appropriate representation of its financial position.
- Meeting – these meetings are “annual meeting” and “board meeting”. The timely conduct of the meeting is considered helpful for the company and also for their progress.
Every private limited company is required to hold a meeting with shareholders once in every year and their agenda is to include financial statements, declaration of dividend and certain appointments etc.
And the board meeting shall held in calendar year (in every 3 months).
- Maintenance of register and records. These register and records are required by the company law as register of shares, members, etc.
There are other compliances such as preparation of Director’s Reports, filing of financial statements, annual returns etc.
With compliance for LLP, this means the limited liability partnership. LLP should maintain the various records as the private limited company, but they maintain books of accounts too.
The books of accounts are either on the cash basis, for every year of business. They also have the requirements of audit; but in certain cases if its turnover does not exceed 40 lakhs rupees and the capital contribution of the partners doesn’t exceed 25 lakh rupees.
They also have the maintainable record and returns.
- Minute book- maintain meeting of partners
- Supplementary LLP agreements
- Annual returns
- Inspection of documents.
- They also have first general meeting (within 30 days of incorporation), general meeting (in 1 financial year) and executive committee.
Finally, the compliance for the OPC, this means one person company. They have 1 shareholder and 1 director. With having the maintenance of books of account which is mandatory as LLP and LPC too.
But here, there is no requirement of any board meeting as they have only one director. In case, if there is more than 1 director, the board meeting should be held with 30 days from the date of incorporation of company. They don’t have any annual general meeting. The tax audit occurs if the annual turnover is more than 1 crore. It can be dissolved, voluntarily by shareholders, creditors or tribunal. This is the appropriate compliance for the private limited company, One Person Company and Limited Liability Company.
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Author: This blog is written by Ms. Deepshikha Dabi, student of Vivekananda Institute of Professional Studies, a passionate blogger & intern at Aapka Consultant.
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