Compliance for Private Limited Company in India after incorporation
In this article, We will take you through the post incorporation compliance required for Private Limited Company.
As we know that, Private Limited Company is the most suitable and democratic form of entity for carrying out business in India with a long term objective. It is also considered as the best suitable form of business for new start-ups planning to raise fund or looking for angel funding.
By registering a Private Limited Company, you being a founder/promoter enjoy numerous benefits like you can raise business fund, raise business loan, etc.,
But, to enjoy these benefits, you have to comply with the provisions of Companies Act, 2013.
If, you are one of those who has recently registered his/her company or just planning to do so.
You must check out the below mentioned some mandatory compliance(s) for a Pvt Ltd Company in India, which needs to be completed after Incorporation.
Appointment of Auditor
One of the first compliance after receiving COI (Certificate of Incorporation) is the appointment of the first auditor of company.
As per the provisions of section 139(6) of Companies Act, 2013, the first auditor of the company shall be appointed by the Board within 30 days of Incorporation. In case, Board fails to do so, an EGM (Extra Ordinary General Meeting) shall be called within 90 days to appoint the first auditor.
Certificate of Commencement of Business
It is mandatory to obtain certificate of commencement of business. Companies registered on or after 2nd November, 2018 are required to file the declaration for commencement of business with the Registrar of companies
The declaration for commencement of business shall be filled within 180 days from the date of getting CERTIFICATE OF INCORPORATION.
Fee for filing e-Form 20A:
Post incorporation compliance require the Board of Directors of the company to hold a board meeting within 30 days from the date of registration of the company.
The First meeting of the Board of Directors of a Private Limited Company shall be conducted within 30 days from the date of Incorporation of company.
- Minimum Four Board Meetings: At least four board meetings must be held in a calendar year (one meeting in every 3 months).
- In case of a Private Limited Company which is classified as a “Small Company”, at least two board meetings must be held in a calendar year (one meeting in every half year)
*Most of the startups fall within the category of “Small Company”.
- Minimum 2 directors or 1/3rd of the total number of directors, whichever is greater, are required to be present in meeting of the Board of Directors. The discussions of the meeting need to be drafted and recorded in the form of “Minutes of the Meeting” and maintained at the Registered Office of the Company.
- Intimation: Directors should be intimated about the date and purpose of the meeting by giving a notice at least 7 days in advance from the date of the meeting. (7 days advance notice)
Disclosure of Director’s Interest
Disclosure of director’s interest and declaration regarding disqualification is also one the important compliance after incorporation.
As per the provisions of companies act, that every directors of the company at the first meeting of board, will be required to disclose their concern or interest in other company(s),or bodies corporate, firms or other associations of individuals and also declare that they are not disqualified to become a director (section 164).
These disclosures are to include directorship and shareholding. This is an ongoing compliance as well; directors must disclose their other interests from time to time as required by the Companies Act.
Issue of Share Certificates
Issue of share certificate to the subscribers of memorandum (MOA) is also one of the post incorporation compliance.
Every company, within a period of two months from the date of incorporation, must issue & deliver the share certificates to the subscribers of the memorandum. This means that the subscriber has to remit the agreed subscription amount within 60 days from the date of incorporation.
Company(s) failing to do so within above stipulated time period will be liable to pay fine/penalty.
Failure by the company to deliver the share certificates will attract a fine of Rs. 25,000 but which may extend to Rs. 500,000. Also, every officer of the company who is in default shall be punishable with a fine of Rs. 10,000 but which may extend to Rs. 100,000.
Company: Rs. 25,000 but which may extend to Rs. 500,000.
Officer: Rs. 10,000 but which may extend to Rs. 100,000.
Registered Office Address
The registered office of a company is a place where all communication pertaining to company is send.
A company shall, on and from the 15th (fifteenth) day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices.
Company is required to furnish to the ROC (Registrar of Companies) within a period of 30 days of its incorporation, verification of its registered office in such manner as may be prescribed.
Apart from that, every company shall—
- paint or affix its name and the address of its registered office, and keep the same painted or affixed, on the outside of every office or place of business in legible letters,
- this board (paint/affix) must be of one of the languages in general use in that locality,
- have its name engraved in legible characters on its seal;if any
Apart from above mentioned mandatory compliance’s, there are other logistical compliances too, which every company must comply for smooth functioning of its operation.
Every Company should have its letterhead having mandatory particulars like its name, registered office address, CIN number (corporate Identity Number) along with telephone number, fax number (if any), e-mail id and website addresses, if any, printed on it.
PAN and TAN
After incorporation, every company must apply for a valid Permanent Account Number (PAN) and Tax Account Number (TAN).
Statutory Registers & Records
A Private Limited Company has to maintain various statutory registers and records as required by the Company law such as:
- Register of shares,
- Register of Members,
- Register of Directors
Besides, Incorporation documents of the company, Resolutions of the meetings of the Board of Directors, Minutes of the Board Meetings and Annual General Meeting etc are also required to be preserved by the Company.
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