What are the Post Incorporation Compliance of a Private Limited Company?
Simply getting a Certificate of Incorporation is not enough. Companies Act, 2013 lists various provisions that need to be complied with once Certificate of Incorporation is received by a Private Limited Company. Companies Act, 2013 has increased the number of compliances which a private limited company needs to perform mandatorily post incorporation.
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Appointment of first auditor: The first compliance a company needs to do is appoint its first auditor as per Section 139(6) of Companies Act, 2013. The appointment is to be made by the Board of directors within 30 days of registration of the company. If they fail to do so, they shall inform the members of the company and they will make the appointment in an Extraordinary General Meeting (EGM) within the next 90 days. The first auditor shall hold office till the end of the 1st Annual General Meeting (AGM).
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Disclosure of interest of directors: This was a new provision introduced by Companies Act, 2013. As per Section 184(1) of the Act, every director, whether new or existing, is required to disclose his interest to the company. The director shall disclose such information in his first Board meeting, first Board meeting of every financial year and in the next meeting whenever there is a change in any director’s disclosure. The company then needs to tell these interests to the registrar in form MGT14.
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Set up company’s registered office: As per Section 12 of the Act, a company needs to set up its registered office within 15 days of its date of incorporation. It also needs to inform the registrar about the registered office in form INC22 within 30 days of date of incorporation. If the provision is not complied with then the company needs to pay fine in form of additional fees.
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Allotment of shares to MOA (Memorandum of Association) subscribers: Post incorporation a company needs to allot shares and share certificates to all the subscribers of MOA within 2 months of date of incorporation as per Section 56(4)(a) of the Act. To comply with this provision a company needs to open a bank account first.