In this write up I have shared compliances needed to be done under Companies Act, 2013 after incorporation of a company with special focus on Private Limited companies registered in India.
Page Contents
- Minimum Compliances after Registration of a Company under Companies Act, 2013
- 1. FIRST BOARD MEETING WITHIN 30 DAYS FROM THE DATE OF INCORPORATION
- 2. APPOINTMENT OF FIRST AUDITOR
- 3. DISCLOSURE OF DIRECTOR’S INTEREST AND DECLARATION REGARDING DISQUALIFICATION
- 4. REGISTERED OFFICE
- 5. OPENING OF BANK ACCOUNT FOR THE COMPANY
- 6. ALLOTMENT OF THE SECURITIES
- 7. THE ISSUE OF SHARE CERTIFICATE WITHIN 60 DAYS
- 8. PAYMENT OF STAMP DUTY ON ISSUANCE OF SHARE CERTIFICATE
- 9. PROFESSIONAL TAX REGISTRATION OF COMPANY AND ITS DIRECTORS
- 10. OBTAIN REGISTRATION UNDER SHOPS AND ESTABLISHMENT ACT
- 11. GST/ IEC REGISTRATIONS
- 12. LETTERHEAD & STATUTORY REGISTERS
- 13. Maintenance of Minutes
- WHAT ARE THE YEARLY COMPLIANCES
- WHAT IF THERE IS NON-COMPLIANCE
Minimum Compliances after Registration of a Company under Companies Act, 2013
1. FIRST BOARD MEETING WITHIN 30 DAYS FROM THE DATE OF INCORPORATION
As per the provision of companies act 2013 along with the secretarial standard as issued by ICSI the Company has to conduct its first Board Meeting within 30 days of incorporation of Company for discussing the relevant factors, like- to discuss about certificate of incorporation of Company as issued by ROC, prospective working of the company and other factors which are relevant for the company.
2. APPOINTMENT OF FIRST AUDITOR
As per the provision of companies act 2013 (section-139) the Company has to appoint the first auditor of the company who shall hold the office upto the first Annual General Meeting of the company, it can be an Individual or a Firm, qualified to be appointed as an Auditor of the company. The company has to file ADT-1 with the ROC for the appointment of the auditor along with the necessary documents which are required to be attached with ADT-1. In case the board is not able to appoint the first auditor of the company then he shall be appointed in an extraordinary general meeting of the Company within next 90 days from the date of incorporation of the Company.
3. DISCLOSURE OF DIRECTOR’S INTEREST AND DECLARATION REGARDING DISQUALIFICATION
As per the provision of companies act 2013 (Section-184) the first directors of the company has to disclose their interest in other entities to the company in the meeting of board of directors (MBP-1) and board will discuss on the same and intimate to ROC for this if required the company will also maintain the record of the same in the register of the company (MBP-4). This is the very important compliance because it will help the company to easily identify the related party transaction.
4. REGISTERED OFFICE
As per section 12 of the companies act 2013 the Company must have its registered office within 30 days from the date of incorporation and all the times thereafter so that correspondence can be easily exchanged with the company by authority/authorities with which company is being registered like ROC, RBI. SEBI etc.
5. OPENING OF BANK ACCOUNT FOR THE COMPANY
After the incorporation of the company, there must be a bank account in the name of the company so that the authenticity of each and every transaction can be maintained for the sake of stakeholders of the company. Following documents are required for the opening of a bank account;
6. ALLOTMENT OF THE SECURITIES
As per the provision of Companies Act 2013, the Company must allot the shares to its subscribers within 60 days from the date of incorporation of the company whose name is mentioned in the articles of association and memorandum of association of the company.
7. THE ISSUE OF SHARE CERTIFICATE WITHIN 60 DAYS
As per the requirement of the provision of Companies act 2013 (section -56) the Company must issue share certificates to all the subscribers of the Company within 60 days from the date of incorporation of the company duly signed by MD and CS if any otherwise by any two directors of the Company (Section 56(4) ).
Share certificate shall bear the following details:
a) Number of share certificate,
b) Name of the subscriber,
c) Number of shares purchased,
d) The face value of the share,
e) Amount received,
f) Kind of share (equity or preference).
8. PAYMENT OF STAMP DUTY ON ISSUANCE OF SHARE CERTIFICATE
As per the requirement of the provision of the Indian Stamp Act 1899, every instrument must bear a stamp duty with the proper amount and it must be paid to the concerned department within 30 days from the date of issue of share certificates (Revenue Department). It can be paid via portal SHCIL online with necessary attachment.
9. PROFESSIONAL TAX REGISTRATION OF COMPANY AND ITS DIRECTORS
It is the tax levied by the various State Governments of India on salaried individuals, working in government or non-government entities, or in practice of any profession, such as Chartered Accountants, Lawyers, Doctors, etc. or carry out some form of business are required to pay this professional tax. Different states have different rates and methods of collection. Professional tax is imposed at the state level in India. It is not imposed in all states. The states which impose the professional tax are Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Meghalaya, Odisha, Sikkim, Tamil Nadu, Telangana, Tripura, and West Bengal.
10. OBTAIN REGISTRATION UNDER SHOPS AND ESTABLISHMENT ACT
Shop and Establishment Act is one of few labor laws enacted and enforced by state govt in India. It is one of the important regulations to which most business subject to. The Act is designed to regulate the payment of wages, hours of work, leave, holidays, terms of service and other work conditions of people employed in the shop and commercial establishments.
11. GST/ IEC REGISTRATIONS
As per the GST Council, entities in special category states with an annual turnover of Rs.10 lakhs and above would be required to register under GST. All other entities in rest of India would be required to register for GST if annual turnover exceeds Rs.20 lakhs. There are also various other criteria’s, that could make an entity liable for obtaining GST registration – irrespective of annual sales turnover. Entities required to register for GST as per regulations must file for GST application within 30 days from the date on which the entity became liable for registration under GST. Many types of registration like VAT, Excise Duty, Service tax, CST, Import-Export, Luxury Tax are not required it will help in less compliances and apart from this, it will help to focus more on business.
12. LETTERHEAD & STATUTORY REGISTERS
As per Companies Act 2013 which is applicable from 1st April 2014, letterheads and other letters also need certain format certain things to be mandatorily mentioned are Name of the company Address of its registered office CIN no (corporate identity number) of the company Phone numbers Fax number, e-mail id, A website, if any on all business letters, billheads, notice, letter papers & other official publications also, It is mandatory to paint, affix, print its name, registered office on the outside of every office, place in which its business carried on and its name engraved in legible characters on its seal.
The Registers need to maintained and updated eventually and should be kept at the Registered Office of the Company. Some of the Registers are required to be kept open for inspection by Directors, Members, and Creditors and by other persons. A Company is required to provide the extracts from the Registers if demanded by Directors, Members, and Creditors and by other persons on payment of specified fees.
Types of the registers which are required to be maintained as per the companies act 2013
| FORM | PURPOSE |
| MGT-1 | Register of Members |
| MGT-2 | Register of Debenture holders Register and Index of Beneficial Owner |
| MGT-3 | Foreign Register of Members, Debenture holders, other security holders or beneficial owners residing outside India |
| Form SH-2 | Register of Renewed and Duplicate Share Certificate |
| Form SH-3 | Register of Sweat Equity Shares |
| Form SH-6 | Register of Employee Stock Options |
| Form SH-10 | Register of Shares or Securities Bought Back Register of Directors and KMPs Register of Deposits |
| FormCHG-7 | Register of Charges |
| Form MBP-2 | Register of Loans/Guarantee/Security and Acquisition by Company |
| Form MBP-3 | Register of Investments not held in its own name |
| Form MBP-4 | Register of Contracts or Arrangements in which Directors Are interested |
13. Maintenance of Minutes
After Incorporation it is the responsibility of a Company Secretary (Directors in absence of CS) to prepare Minutes after Board Meeting, Annual General Meeting, EGM, Committee Meeting and get them signed and Maintain sequentially. Minutes Book must be updated and signed also preserved promptly.
WHAT ARE THE YEARLY COMPLIANCES
1) Minimum 4 board meeting with an interval of maximum 120 days between 2 consecutive board meetings,
2) Statutory audit of accounts,
3) Filing of annual return (form MGT-7),
4) Filing of financial statements (form AOC-4),
5) Holding annual general meeting,
6) Preparation of directors’ report.
7) Filing of DIR-3 KYC of directors.
8) Filing of MSME-1 half yearly.
WHAT IF THERE IS NON-COMPLIANCE
If a Company fails to comply with the rules and regulations of the Companies Act, then the Company and every officer who is in default shall be punishable with fine for the period for which default continues.
(The author is a Company Secretary in and can be reached at (M) 7021848742 and (E) csannusharma123@gmail.com, In case of any discrepancy }
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