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Introduction

  • All about Private Limited Company
  • Definition
  • Meetings
  • Business to be transacted
  • Form Filing
  • Time Frames
  • Documentation
  • Process and Procedures
  • Checklist for bare minimum compliance
  • Act and Secretarial Standards

Definition of Private Company

As per Section 2 (68) of Companies Act, 2013“private company” means a company having a minimum paid-up share capital (of one lakh rupees or such higher paid-up share capital*) as may be prescribed,and which by its articles,—

(i) restricts the right to transfer its shares;

(ii) except in case of One Person Company, limits the number of its members to two hundred:

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:

Provided further that—

(A) persons who are in the employment of the company; and

(B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased,shall not be included in the number of members; and

(iii) prohibits any invitation to the public to subscribe for any securities of the company;

Note: *Words ‘of one lakh rupees or such higher paid-up share capital’ omitted by the Companies (Amendment)Act, 2015, w.e.f. 29.05.2015

BUSINESS TO BE TRANSACTED AT THE MEETING

First Board Meeting

In case of newly incorporated company (within 30 days of incorporation)

  • Certificate of Incorporation of the Company
  • Constitution of the Board
  • Financial year of the Company
  • Adoption of draft share certificate
  • Registered office of the Company
  • Application for all statutory licenses from various regulatory authorities on behalf of the Company
  • Appointment of statutory auditors(up to 1st AGM)
  • Opening of bank account
  • Maintenance of statutory registers
  • Signing authority for filing of e-forms and other documents with the Ministry of Corporate Affairs and other authorities
  • Taking note of disclosure of interest under section 184 (1) of the Companies Act, 2013 received from all the directors of the Company (In Form MBP-1)
  • Taking note of certificate under section 164 (2) of the Companies Act, 2013 received from all the directors of the Company (Intimation by Director - In Form DIR-8)
  • Any other business

In case of an existing company (within 120 days of previous Board Meeting)

1. Taking note of disclosure of interest under section 184 (1) of the Companies Act, 2013 received from all the directors of the Company (In Form MBP-1)

2. Taking note of certificate under section 164 (2) of the Companies Act, 2013 received from all the directors of the Company (Intimation by Director - In Form DIR-8)

3. Signing authority for filing of e-forms and other documents with the Ministry of Corporate Affairs and other authorities

4. Any other business

Second Board Meeting (within 120 days of previous Board Meeting)

1. Approval of draft Financial Statements of the Company for the year ended March 31, _______

2. Taking note of the Auditor’s Report on the financial statements for the year ended March 31, ________

3. Approval of draft Board of Directors Report for the year ended year ended March 31, _________

4. Appointment of Statutory Auditor of the Company/ Ratification of appointment and fixing of remuneration thereof

5. Recommendation for regularization of Additional Director, if any

6. Approval of the draft notice for calling Annual General Meeting of the Company

7. Recommendation of dividend, if any

8. Increase in authorized share capital, Rights issue of shares, Private placement, Allotment of shares, Sharetransfer, Adoption of new Articles of Association under Companies Act, 2013, Taking note of resolution passed by circulation etc., Appointment of Cost Auditor/ Internal Auditor, Approval of any policies, Alteration of MoA / AoA, Secretarial Audit etc.(Optional)

Annual General Meeting (Section 96)

1. Auditors Report

Ordinary Business

2. Consideration of Financial Statement and report of the Board of Directors and Auditors for the year ended March 31, ______,File Form AOC-4 (within 30 days of AGM), File Form MGT-7 (within 60 days of AGM)

3. Declaration of Dividend, if any

4. Appointment of Director, in place of those retiring

5. Appointment of and fixing of remuneration of auditors/ ratification of appointment, whichever applicable, File Form ADT-1 (within 15 days of AGM)

Special Business

6.Regularization of (Additional)Director *(WTD/Manager/MD/CEO if any),File Form DIR-12 (within 30 days of AGM), *File Form MR-1 (within 60 days of AGM)

7. Or any other business (optional)

Third Board Meeting (within 120 days of previous Board Meeting)
Review of business or any other business (no specific business prescribed under the act)

Fourth Board Meeting (within 120 days of previous Board Meeting)
Review of business or any other business (no specific business prescribed under the act)

CHECKLIST for bare minimum compliance of Private Limited Company(Companies Act, 2013 and Secretarial Standards):

1. Notice of Board Meeting along with Agenda for the business to be transacted (at least 7 days before the Board Meeting date)

2. Notice of Annual General Meeting or Extra Ordinary General Meeting (at least 21 clear days before the Meeting date)

3. Consent for shorter notice from directors/ members (if notice of meeting not given as per the prescribed time)

4. Attendance sheet to be maintained, signed by the directors/invitees present and authenticated by the Company Secretary

5. Name of special invitee to be specifically mentioned in the attendance sheet (business for which he/ she was present need to be mentioned)

6. Agenda and attendance sheet to be circulated along with the notice of meeting (except in case of price sensitive or confidential information, need to be mentioned in the pre-amble if not mentioned in the agenda earlier)

7. Road map for the venue of meeting to be given along with the notice

8. Notices to be acknowledged by the directors/members in receipt of the same and date of acknowledgement to be mentioned

9. All proofs of dispatch/delivery of documents to be maintained and preserved

10. Minutes to be printed on green paper/minutes paper only

11. Minutes to be serially numbered and page numbers to be mentioned on each minute page

12. Time at which the meeting commenced and concluded to be mentioned in the minutes

13. Separate minutes books to be maintained for board meeting and members meeting

14. Rationale for passing of resolution need to be mentioned in the minutes (in the pre-amble)

15. Dissenting views of the director/ member to be mentioned in the minutes

16. Where in the minutes we mention that the draft was initialed by the Chairman for the purpose of identification, the drafts presented in the meeting to be maintained and preserved for records

17. When notice given through emails, directors who have read the same to revert on the said email acknowledging the receipt of notice. The replies can be kept as proof of dispatch

18. Leave of absence not to be granted if not specifically asked for by the director. Request letter from director for grant of leave of absence to be maintained

19. Certified True Copies of resolutions (CTCs) to be given only after the minutes have been signed. Alternatively, CTCs can be used as proofs if the text of resolution is given in the notice itself

20. Time period from meeting to circulation of final minutes and signing:

  • Circulate draft minutes within 15 days of conclusion of meeting
  • Comment by Director on draft Minutes within 7 days of circulation of draft minutes
  • If no comment is received within 7 days, those minutes shall be considered as final
  • Signing of final minutes by Chairman within 30 days of conclusion of meeting
  • Minutes of the Meeting of the Board shall be signed and dated by the Chairman of the Meeting or by the Chairman of the next Meeting
  • Minutes to be entered in the minutes book within 30 days of the conclusion of the meeting

21. Resolution passed by circulation (Section 175 of Companies Act, 2013) to be ratified by the Board in the next Board meeting

22. Statutory Registers need to be maintained as prescribed

23. Maintain a Compliance-Cum-Event Sheet in order to keep a tap on the transactions taken, compliance required, time lines to be adhered and mandatory/prescribed actions as per the act and secretarial standards so as to be compliant and avoid non-compliance(Recommendatory)

Note:

The above article is intended to act as a summarized check-list for understanding the bare minimum compliance of Private Limited Company.

The Act, Rules and Secretarial Standards may be referred to for a detailed study.

Stop Doing What Is Easy. Start Doing What Is Right. Compliance It Is!

Author is a Company Secretary, has great interest in writing and can also be reached atjayaranga51@gmail.com

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