Before You Register · Chapter 3
The real cost of running a company every year
In short
Running a company costs money every year, even with zero sales: a PVT. LTD. needs an annual audit, board meetings, an AGM, ROC filings and an income tax return. An LLP's yearly load is lighter.
Running a company in India costs money every year, even in a year with zero sales: a Private Limited Company must get its accounts audited, hold board meetings and an AGM, and file annual forms with the Registrar of Companies and an income tax return. An LLP's yearly load is lighter, and a GST Registration brings its own returns.
A Registration fee is paid once. Compliance is paid every year for as long as the entity exists — including the years when there is no business at all. Before you register, know what you are signing up for.
What must a PVT. LTD. do every year?
- Keep books of accounts and get them audited by a Chartered Accountant — every year, whatever the turnover.
- Hold board meetings and an Annual General Meeting (AGM), and keep minutes.
- File financial statements (Form AOC-4) and the annual return (Form MGT-7 or MGT-7A) with the Registrar of Companies.
- File the company's income tax return.
- Directors keep their DIN KYC up to date — the DIR-3 KYC is now filed once every three financial years, by 30 June.
What must an LLP do every year?
- Keep books of accounts.
- File Form 11 (annual return) by 30 May and Form 8 (statement of accounts and solvency) by 30 October with the Registrar.
- Get accounts audited only if turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh.
- File the LLP's income tax return.
Main yearly filings at a glance
| Filing | Who | When |
|---|---|---|
| AOC-4 (financial statements) | PVT. LTD. | Within 30 days of the AGM |
| MGT-7 / MGT-7A (annual return) | PVT. LTD. | Within 60 days of the AGM |
| Form 11 (annual return) | LLP | By 30 May |
| Form 8 (accounts and solvency) | LLP | By 30 October |
| DIR-3 KYC | Every director and designated partner with a DIN | Once every three financial years, by 30 June |
| GST returns | Anyone with a GSTIN | Monthly or quarterly |
What does everyone registered under GST have to do?
Once you have a GSTIN, returns are due every month or every quarter — even in a month with zero sales. Missing a nil return still attracts a late fee. Due dates are published on the GST portal.
Why "zero business" is not zero cost
A company that has not started trading still has to file its annual forms and hold its meetings. Late filing of AOC-4 and MGT-7 costs an additional fee of ₹100 per day, per form, with no upper cap, and directors of companies that default for three years in a row can be disqualified. Many founders learn this only when they try to register their next company.
How to budget honestly for yearly compliance
Ask your professional for a written yearly compliance fee — accounting, audit, ROC filings, income tax and GST — before you register, not after. A Registration that looks cheap can be the most expensive decision if the yearly cost was never explained.
Key takeaways
- Compliance is yearly and applies even with no sales.
- PVT. LTD. has the heaviest yearly load; LLP is lighter below the audit limits.
- Get a yearly compliance quote in writing before you register.
Frequently asked questions
Does a company have to file returns if it has no business?
Yes. A Private Limited Company must hold its meetings, get its accounts audited, file its financial statements (AOC-4) and annual return (MGT-7 or MGT-7A) and file an income tax return every year, even if it had no sales at all. A company with no significant transactions can apply for dormant status, which reduces but does not remove its filings.
Is audit compulsory for a Private Limited Company with zero turnover?
Yes. Every company registered under the Companies Act, 2013 must have its financial statements audited by a Chartered Accountant appointed as statutory auditor, every year, whatever its turnover. There is no turnover threshold below which a PVT. LTD. is exempt from statutory audit. This is different from an LLP, which needs an audit only above set limits.
When is an audit required for an LLP?
An LLP must get its accounts audited when its turnover exceeds ₹40 lakh in a financial year or its partners' contribution exceeds ₹25 lakh. Below both limits, the designated partners can certify the accounts themselves. A separate tax audit under income tax law may still apply if the LLP's turnover or receipts cross the income tax audit limits.
What happens if a company does not file its annual returns?
Late filing of forms such as AOC-4 and MGT-7 attracts an additional fee of ₹100 per day for each form, with no upper limit. If a company fails to file for three continuous financial years, its directors can be disqualified from being directors of any company for five years, and the Registrar can take action to strike off the company.
Do I need to file GST returns if there are no sales?
Yes. Once you hold a GSTIN, returns must be filed for every tax period, monthly or quarterly depending on the scheme you are in, even when there were no sales or purchases. A nil return can be filed quickly on the GST portal, but filing it late still attracts a late fee. If the business has stopped, you can apply to cancel the GST Registration.
