Mandatory compliances for private limited company post incorporation



  • Once your private limited company is incorporated there are certain necessary compliances that required to be adhered with post incorporation. Such as:
     

    Appointment of Auditor

    • One of the first necessary step after having obtained your company’s Certificate of Incorporation is the appointment of the first auditor of the company. Within 30 days from the date of registration of the company, the Board of Directors must call a board meeting and appoint an auditor for the company.
    • In case the Board fails to appoint an auditor within the above timeline, it is required to inform the members of the company, who may then within 90 days of such intimation, appoint the first auditor of the company at an Extraordinary General Meeting.
    • The tenure of the auditor so appointed is to be till the conclusion of the first Annual General Meeting.
     

    Board meeting

    • 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 shall 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 shall be held in a calendar year (one meeting in every half year).
    • 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
     

    Disclosure of Director’s Interest and Declaration Regarding Disqualification

    In the Board meeting the directors of the company will be required to disclose their concern or interest in other companies or bodies corporate, firms or other associations of individuals and declare that directors are not disqualified (as per Section 164). These disclosures are to include directorship and shareholding.
     

    Registered Office

    • On and from the 15th day of its incorporation and at all times thereafter, the company is required to have a registered office capable of receiving and acknowledging communication and notices.
    • The company is required to file a verification of the registered office with the Registrar of Companies within a period of 30 days of its incorporation in form INC-22.
     

    Issue of Share Certificates to Subscribers

    • Within a period of two months from the date of incorporation, every company must issue the share certificates to the subscribers of the memorandum.
    • Failure by the company to deliver the certificates will attract a fine which shall not be less than Rs. 25,000 but which may extend to Rs. 5,00,000.
    • Every officer of the company who is in default shall be punishable with a fine which is not less than Rs. 10,000 but which may extend to Rs. 100,000.
     

    Shareholders meeting

    • Every Private Limited Company is required to hold a meeting of its shareholders once in every year within a period of six months from the date of closing of the financial year.
    • The primary agenda behind this is to get approval of financial statements, declaration of dividends, appointment or re-appointment of auditors, appointment and remuneration of directors etc.
    • This shall be held during business hours on a day which is not a public holiday and shall take place at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated.
     

    Statutory Audits of Account

    Every Company shall prepare its Accounts and get the same audited by a Chartered Accountant at the end of the Financial Year compulsorily. The Auditor shall provide an Audit Report and the Audited Financial Statements for the purpose of filing it with the Registrar.
     

    Annual RoC Filings

    Private Limited Companies are required to file its Annual Accounts and Returns disclosing details of its shareholders, directors etc. to the Registrar of Companies every once a year.
    The following forms are to be filed with the ROC:
    • Form MGT-7 (Annual Return): Every Private Limited Company is required to file its Annual Return within 60 days of holding of Annual General Meeting. Annual Return will be for the period 1st April to 31st March.
    • Form AOC-4 (Financial Statements): Every Private Limited Company is required to file its Balance Sheet along with statement of Profit and Loss Account and Director Report in this form within 30 days of holding of Annual General Meeting.
     

    Corporate social responsibility

    Now a Private Company having,
    • Net worth of Rs. 500 crore or more, or
    • Turnover of Rs. 1000 crore or more, or
    • Net profit of Rs. 5 crore or more
    shall contribute 2% of its net profit in CSR activities as mentioned in rules pertaining thereto and shall also have a CSR committee Consisting of minimum 2 directors.
     

    Income Tax Compliances

    • Filing of Income Tax Returns
    • Tax Audit – Mandatory in case sales, turnover or gross receipts of a business exceed Rs. One Crore in the previous year relevant to the assessment year.
    • Filing of Tax Audit Report
    • Calculation and quarterly payment of advance tax
     

    Maintenance of Statutory Registers and 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
    Incorporation documents of the company
    Resolutions of the meetings of the Board of Directors
    Minutes of the Board Meetings and Annual General Meeting
    Such records are to be kept at the registered office of the company and shall be open for inspection to its members during business hours.
     

    Other important Filings

    Besides Annual Filings, there are various other compliances which need to be done as and when any event takes place in the Company. Instances of such events are:
    • Change in Authorised or Paid up Capital of the Company.
    • Allotment of new shares or transfer of shares
    • Giving Loans to other Companies.
    • Giving Loans to Directors
    • Appointment of Managing or whole time Director and payment of remuneration.
    • Loans to Directors
    • Opening or closing of bank accounts or change in signatories of Bank account.
    • Appointment or change of the Statutory Auditors of the Company.
    Different forms are required to be filed with the Registrar for all such events within specified time periods. 

     

    These guides are not legal advice, nor a substitute for a lawyer

    These articles are provided freely as general guides. While we do our best to make sure these guides are helpful, we do not give any guarantee that they are accurate or appropriate to your situation, or take any responsibility for any loss their use might cause you. Do not rely on information provided here without seeking experienced legal advice first. If in doubt, please always consult a lawyer.

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