A presence in the global market and ecosystem is essential for companies seeking sustained growth. The Ease of Doing Business (EODB) initiative for the digitalization of India has enormous advantages. Setting up a new PLC (Private Limited Company) under this initiative makes a growth conducive environment, smoother functioning and simplified operations.
After the registration of PLC, some compliances are mandatory for the decent system to move forward and startups can build their existence in the market. Being the legal advisor, we can help you in setting your post-incorporation formalities with ease. According to the Companies Act, 2013, below are the requirement you need to fulfil within the specific time frame.
10 compliances to keep in mind post-incorporation of PLC
Here is the list of compliances that need to take care of after the registration of PLC within the specific time frame. Don’t miss out on it.
Register Official Company Address
You can register the official address at the time of incorporation of the company. Else a company must have to register within 15 days of incorporation. The company needs to inform the registrar about the same by filing a Form INC-22 within 30 days from the incorporation date. It is used as official communication from the various authorities.
Also read: Changing the registered office of a Company
Hold Meeting of Board of Directors (BODs)
According to Section 173(1) of the Companies Act 2013, the company must arrange a first meeting with the Board of Directors within 30 days of its incorporation. The agenda of the meeting is to elect a chairman, appointment of the first auditor, Register the Company’s address, statutory register, and disclose the interest of directors.
Appoint the First Auditor of Company
The auditor must appoint by the BODs within 30 days from the registered date as per Section 139(1) of the Companies Act. If someone is failing in doing the same. Immediately, an extraordinary general meeting needs to be organized to appoint an auditor within 90 days.
Disclose Interest of Directors
As per section 184(1) of the Companies Act 2013, all the directors shall disclose their interest to the company in the BODs meeting. It will further discuss when there is any change in disclosure. According to that, all the directors meet the company’s goal individually and as a whole.
Maintain Statutory Registers
According to the Companies Act, letterheads, billheads, notice letter paper, and other official publications follow certain mandatory information:
- Name of the company
- Address of the registered office
- CIN (Corporate Identity Number) of the company
- Phone number
- Fax number
- Email ID
- Website, if any
A company must maintain statutory registers under the registered office as it is subject to penalties.
Open Company Bank Account
A company must open a bank account within 60 days from the date of incorporation with its name so that the transactions can be recorded easily. Here are the required documents to open the bank account:
- Incorporation certificate and Memorandum of Association
- Registered office as address proof of the company.
- Director’s identity proof alone with authorized signatories PAN card
- Resolution of BODs to open an account
- PAN allotment letter
Issue Shareholder Certificates
The Company has to issue a share certificate to shareholders within 60 days from the date of incorporation. If there is an allotment of additional shares, it issues from the date of allotment. The certificate must include:
- Shareholder’s name
- Number of share certificate
- Face value of the share
- Total number of shares purchased
- Preference or equity share
- Received amount
File Form INC-20A
Once a company receives an incorporation certificate, directors must file an INC-20A Form within 180 days of the commencement of business to MCA. It is a Declaration of Commencement of Business. After that, a company requires a bank account for depositing the share capital subscribed in MOA (Memorandum of Association) by every promoter.
Maintain Books of Accounts
According to Section 128 of the Companies Act, it is mandatory to maintain proper books of accounts that represent an accurate and fair view of the company’s state of affairs. The double entry rule shall follow along with the accrual basis of accounting.
Annual Compliance for PLC
The annual compliances for PLC need to be filed within 6-8 months after the end of every financial year. However, if you have incorporated your company on or after January month then the first financial year will be of 15 months. The first Annual General Meeting (AGM) is conducted within 9 months from the end of the first financial year. Afterwards, the AGM holds within 6 months from the end of the financial year. Form AOC-4 and MGT-7 need to file within 30 days and 60 days respectively with the Ministry of Corporate Affairs (MCA) as part of company compliances. In AOC-4, signed audit reports of the financials of the company and board reports are submitted. In MGT-7, a list of shareholders along with details of all Board meetings during the year are submitted.
The global market is dynamic and fluid – companies seeking to expand can definitely leverage a supportive environment. Against this backdrop, it is important to stay aware of laws, rules and norms that impact the business.