Mandatory Post Incorporation Compliances for Companies
Companies are regulated by the Companies Act and in order to register a company one needs to follow certain legal procedures. Also, once the incorporation is done there are a set of stringent compliances that every company has to adhere to. The mandatory compliances post-incorporation of companies are as follows:
1. Meeting of the Board of Directors
The Board of Directors is one of the most powerful bodies in a company. In any organization, the first board meeting has to be conducted within 30 days of its incorporation. There needs to be conducted a minimum of four board meetings in a calendar year, that is, at least one in every quarter. The gap between two consecutive meetings should not exceed 120 days. In the case of small companies with turnover not more than two crores, a minimum of two meetings must be held in a financial year. Important decisions related to the company are agreed upon in the board meeting.
2. Issue of share certificates for your company
As per Section 53 of the Companies Act, 2013 the share certificates issued must be delivered to the subscribers of memorandum within two months from the date of incorporation. If the shareholders surrender their allotted letters, the company should send share certificate to those members by registered post. The subscriber has to remit the agreed subscription amount within 60 days from the date of incorporation.
3. Appointment of auditors
Upon receiving the certificate of incorporation the first thing a business has to do is appoint the first auditor of the company. This has to be done within 30 days from registering the company during the Board Meeting. The Auditor can hold the post until the end of the first Annual General Meeting. If the company fails to appoint the auditor, then the Board of Director should call for an Extraordinary Meeting by informing the members of the Board within 90 days.
5. Filing of disclosure of interest by Directors in your company
The directors of the company can disclose their interest or concern with other companies or firms or other associations of individuals, including shareholding. If a director makes a contract with the company and does not disclose his interest, it is considered as a breach of trust among the directors. Rule 9 of (Meetings of the board and its power) Rules 2014 provides that such disclosure shall be made in form MBP-1 and filed with the ROC in form MGT-14. If the Director fails to disclose his interest he shall be liable with imprisonment which may extend to one year, or with a minimum fine of Rs. 50,000/- which may extend to Rs. 1,00,000/- or with both.
6. Filing of Declaration for Commencement of Business
As per the Companies (Amendment) Ordinance 2018, there is a requirement for all the companies registered on or after 2 November 2018 to file a declaration of commencement of business before it starts the operations. The time period for filing this declaration is 180 days of incorporation of Company. A proof of deposit of the paid-up share capital by the subscribers needs to be attached in the eForm. If a company pursues objects requiring registration or approval from any sectoral regulators such as The Reserve Bank of India and Securities and Exchange Board of India etc, then it shall obtain such registration or approval along with the attached declaration. The eForm has to be verified and certified by a practising professional before filing with the ROC (Registrar Of Companies). If a Company fails to file declaration for commencement of business then it won't be able to file any form on MCA portal.