A business must satisfy various compliance-related requirements upon the establishment to continue operating as per the Companies Act, 2013. The Directors and the Company suffer fines and penalties for non-compliance. Therefore, those who incorporate a business must be aware of the requirements for post-incorporation compliance. This article looks at the 10 Post compliances that a Private Limited Company needs to fulfill, including maintaining the statutory register, issuing share certificates, appointing an auditor, opening a bank account, and more. Let us learn about "What are the Post compliances for a Private Limited Company after incorporation?".
What is a Private Limited Company?
A Private Limited Company is a small, privately owned commercial corporation. Members of a Private Limited Company are only liable for the number of shares they own. Private Limited Company shares are not qualified for public exchange.
Post-Incorporation/Registration Requirements for a Private Limited Company
The following are the post-registration compliances for Private Limited Company
1. A bank account
Companies must open a bank account even before applying for company incorporation approval. No business can be done under a natural person's name because the company is a fictitious entity.
2. Accountancy records
Every company is obligated under Section 128 to maintain accurate books of accounts that reflect the financial condition of the business properly. Accounting must be done on an accrual basis, and the double entry system must be employed.
3. The business must have a seal representing its name
Every business will be obligated to put its name on each location where it does business. It has to be written in the language that's spoken there most often. In addition, the business needs a seal with its name carved on it, letterheads with the necessary information, and printed negotiable documents.
4. Share the certificate
After the date of establishment, a shareholder's share certificate must be issued within 60 days. The duration is specified at 60 days from the date of allotment in the case of more shares.
5. First meeting of the company
A Board of Directors meeting must be held by the company within 30 days of incorporation, under Section 173(1) of The Companies Act, 2013. Directors can take part in the meeting online or via video conference.
6. Statement of Interest
Every director must disclose his ownership interest in any business, firm, body corporate, or association of individuals at the first board meeting, according to Section 184(1) of the Companies Act, 2013. The board must be informed of any changes to the disclosures at its first meeting of the financial year. If there is an independent director, he or she must certify, at the first board meeting, that he or she satisfies the independence standards.
7. Official address of the business
According to Section 12(1), a business must have a registered office within 30 days of incorporation. All official communications from various authorities will be sent to this address. The change must be reported to the registrar within 30 days after the company's establishment.
8. Statutory registers kept at the registrar's office
At its registered office, the company will be required to maintain statutory records. The same must be kept up to date appropriately or the company faces a penalty.
9. Commencement of a business certificate
A certificate of business formation must be given to the company within 180 days of its establishment. The company's directors are required to submit a statement establishing that each subscriber has paid the full amount owed on their shares.
10. Appoint the initial auditor
The first auditor must be chosen by the Board of Directors (BOD) within 30 days of the company's registration, with the exception of a government agency, per Section 139(1). Otherwise, the auditor shall be chosen by the members at a special general meeting to be held within ninety days of the appointment. The term of office of the first auditor shall expire at the conclusion of the first annual general meeting.
Registering a Private Limited Company in India involves these key steps: choose a unique name, obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN), draft and file the Memorandum and Articles of Association, submit incorporation documents with fees, and obtain the Certificate of Incorporation. Don't forget to apply for PAN and TAN for tax purposes and ensure ongoing compliance with statutory requirements for the benefits of limited liability and a structured legal framework.
As you can see, a Private Limited Company must comply with a number of compliance requirements after it is incorporated. The process of incorporating a business may seem challenging to a beginner in the business field. Therefore, it is important to speak with a professional before incorporating your business to ensure that you remain on the right side of the law.