“Do you have a company?? Let’s discuss some post compliance!!!!!”
“Every company starts with a mission to make the world a better place, for the long run of our business and to enhance the stakeholder value we have to take care of profit maximisation along with statutory compliance, although compliance plays a very crucial role in the going concern aspects of the business.
Statutory compliance were not limited to the only Companies Act, 2013 although we have to take care of other laws, provisions and regulations as well, along with this Act.
In this particular article my effort is to take care and to discuss post incorporation compliance as per Companies Act,2013 to the best of my knowledge and in accordance with the applicable provisions.”
“It takes less time to do things right than to explain why you did it wrong” -Henry Wadsworth
Obtaining the Certificate of Incorporation of Company is an exciting moment to start the journey of your business, I would like to tell you that shareholders are the owners and the Directors are the brains of a Company like a parents of a new born child, therefore Directors are fully responsible for all the actions and any non- compliance made by their company.
Once a company is incorporated, a set of compliance-related formalities must be completed within a specified time frame to meet the compliance in accordance with the Companies Act, 2013.
It is important for the Directors and other Key Managerial Personnel of a company to be aware of the post-incorporation compliance requirements of a company, In this article, we look at the post-incorporation compliance required for a company like statutory register maintenance, share certificates, auditor appointment, board meetings and more.
We are required to paint or affix the Name of the company and Address of its Registered office outside every office or place in which it carries on business.
Company must print the letterhead containing its Name, CIN no., telephone no., E-mail, Fax (if any), Website (if any) and Registered office address of the company on all the official documents of the company including letterhead, invoices, notices.
First Board Meeting:
As per Section 173(1), of the Companies Act 2013, the company shall hold a meeting of the Board of Directors within a period of 30 days from the date of its incorporation, moreover as per Companies Act, 2013 it allows Directors of the Board to attend the meeting either in person or through video conferencing.
Disclosure of interest:
At the First Board meeting of the company, every director is under obligation to disclose his/her interest in any company, firm, body corporate or AOP as outlined under section 184(1) of the Companies Act 2013, Any change in the disclosures shall be intimated by the directors to the board in its first meeting held during each financial year thereafter, in case there is any independent director, he must give a declaration that he fulfill the eligibility criteria as outlined under the Companies Act, 2013 to being an independent director of the company.
Appointment of First Auditor:
As per Section 139 (6) of the Companies Act, 2013 every company is required to appoint its first auditor of the Company, within 30 days of incorporation through its board of directors and in case the board of directors fails to appoint the auditor within the said period of 30 days then they must intimate the same to the members of the Company and they shall call an Extraordinary General Meeting for appointing an auditor with in a period of 90 days and Company MAY file ADT-1 with the ROC for the appointment of auditor along with the necessary documents which are required to be attached with ADT-1.
Special Point: Filing of ADT 1 form is not mandatory to be filed by the company in case of first auditor as law does not mandate the same.
Company shall issue share certificates in form SH-1 to the first subscribers within a period of 60 days from the date of Incorporation, Hence, the subscribers to the Memorandum of Association of the Company would deposit the money in the bank account of the company for the shares agreed to be purchased at the time of incorporation and obtain the share certificates of the company accordingly.
All companies are required to maintain some statutory registers i.e register of members, register of directors, charges, Debenture holders and other matters pertaining to the shareholders and management of the company and it must be regularly updated and to be kept at the registered office of the company.
Commencement of business certificate:
As per Section 10A of the Companies Act, 2013 a company incorporated on or after 02-11-2018, having share capital shall not commence its business or exercise any borrowing powers unless a declaration is to be filed by the directors within 180 days from date of incorporation of company in INC 20A (notified on 26-01-2019) with the Registrar of Companies that every subscriber to the MOA has paid the value of the shares agreed to be taken by him and the contents of the said form shall be verified by a Company Secretary, a Chartered Accountant or a Cost Accountant, in practice and Within 180 days the company shall obtain a certificate of commencement of business.
Books of Accounts:
As per section 128 of the Act, every company shall maintain proper books of accounts which shall represent the true and fair view of the financial disclosure of the company, and Companies shall maintain as per double entry book keeping.
1) Minimum 4 Board Meeting with a maximum gap of 120 days between 2 consecutive Board Meeting,
2) Statutory Audit of the financial statements,
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, Balance Sheet, Audit Report, Extract of Annual Return etc.
7) Appointment of Auditor (ADT-1) (if required)
8) Drafting of the Minutes of the Board Meeting and Annual General Meeting of the Company.
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DISCLAIMER: This article is based on the relevant provisions and to the best of my knowledge at the time of preparation of this article and moreover in no event author shall be liable for any direct and indirect result from this article and this is only a knowledge sharing initiative provided solely for information, this article is not a professional advice or recommendation.