The private limited company registration gives you access to crucial benefits: you can add shareholders, attract the best talent with equity and raise loans easily, among other things. But it’s no free lunch. To prove you’re worthy of these advantages, you need to comply with the rules and regulations of the Companies Act, 2013, starting from the day you incorporate. This article serves as a comprehensive guide for all incorporation compliances required to be completed in the two months after incorporation.
1. Appointment of Auditor
One of the first orders of business 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.
2. Disclosure of Director’s Interest and Declaration Regarding Disqualification
Given that certain post-incorporation compliances require the Board of Directors of the company to hold a board meeting (see above) within 30 days from the date of registration of the company, the directors of the company will be required to disclose their concern or interest in other companies or bodies coporate, 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. This is an ongoing compliance as well; directors must disclose their other interests from time to time as required by the Companies Act.
3. 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. Furthermore, every company must:
i. paint or affix its name, and the address of its registered office, and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position and in legible letters. This board must be in one of the languages in general use in that locality;
ii. have its name engraved in legible characters on its common seal, if any;
iii. get its name, address of its registered office and the Corporate Identity Number (CIN), along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, billheads, letter papers and in all its notices and other official publications; and
In case of any default in complying with any of these requirements in respect of the registered office etc., a company and every officer who is in default shall be subjected to a penalty of Rs. 1,000 for every day during which the default continues, not exceeding Rs. 1,00,000.
4. Issue of Share Certificates to Subscribers
Within a period of two months from the date of incorporation, every company must deliver the share certificates to the subscribers of the memorandum. This means that the subscriber has to remit the agreed subscription amount within 60 days from the date of incorporation.
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. Also, 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.
Know More: Vakilsearch’s Annual Compliance Package
There are logistical compliances, too, that companies are required to fulfill immediately after incorporation. These include:
5. Letterhead & Statutory Registers
Mandatory particulars on the letterhead i.e. company identification number (CIN), registered office address, email ID of the company, website address, if any, and telephone number. The statutory registers would also need updating.
6. PAN & TAN
Obtain Permanent Account Number (PAN) and Tax Account Number (TAN) in the name of the company.
7. MGT 14
There must be an intimation to the RoC for certain resolutions passed at any meeting between directors or members of the company through form MGT 14. Such filings should be made within 30 days of passing; else a penalty is leviable.
If you have any clarifications or questions pertaining to compliances required to be made immediately after incorporation, drop us a comment or contact us and we will assist you.