Mandatory compliances for Private Limited Companies

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Mandatory compliances for Private Limited Companies

Not only tax laws, there are equally noticeable compliances to be done for the companies.

All the  more important, the compliances under the companies Act are also attracting heavy penal consequences. MCA – ROC are issuing notices for non compliances. The notices could be either suo motu or may be initiated on the complaint filed with ROC.

Here is a compilation of some of the important compliances which are required to be done by the private limited company.

Every promoter, old or new, must ensure that the compliances is duly done by the private limited company in order to avoid the penal consequences.

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 Display the Company Name Board-

There are various companies which are formed but the name of the companies are not displayed in board at the registered address of the company. Action on Shell companies has revealed the shocking issues to the ED.

Every Company has to either paint or affix the name and address of registered office. Not only this, the board has to be painted or affixed, outside every office or place in which its business is carried on, in legible letters.

Letter Head of Company-

Every Company has to its name, address of registered office, CIN, telephone and email printed on all business letters, billheads, letter papers, notices and other official publications.

First Board Meeting

Promoter must note that first Meeting of Board of Directors is required to be held within 30 days of Incorporation of Company. Notice of BM must be send to every director at least 7 days before the meeting. It is always better to comply the provisions in its true spirit not only for growth but also to avoid future litigation & disputes amongst the promoters.

Subsequent Board Meetings

One must note that Minimum 4 Board Meetings to be held every year with not more than 120 days gap between two meetings.

In case of small company, it is sufficient to conduct only two Board Meetings. Keep proper documents and records in support of having complied with the provisions.

Issuing of Share Certificate

Most of the closely held companies failed to comply this provision in its true spirit. Company has to issue Share Certificates to the subscribers of memorandum within 60 days of Incorporation of Company.

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Amendment & Alteration in MOA and AOA

Every amendment & alteration of Articles and Memorandum has to be filed with Registrar together with copy of altered Articles, notice of meeting and SR within 30 days of passing Special Resolution.

Every such alteration made has to be noted in every copy in MOA and AOA.

Resolution

–       Copy of every resolution (with explanatory statement, if any) or Agreement for the specified matters has to be filed with ROC in Form MGT‐14 within 30 days. Articles of Company has to have copy of resolution effecting amendment in AOA and Agreements referred in Section 117(3) of the Act.

Minutes of Meeting

Minutes of every general meeting, Creditors, Board and Committee has to be prepared and kept within 30 days of conclusion of every meeting concerned.

All appointments in the meeting has to be included in the minutes. Minutes of each meeting has to be entered into Minutes Book along with date of such entry. The record are very relevant if any survey or search by ED or other agencies is carried out and the records are seized.  It serve the purposes of evidences.

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Appointment of Director

Every person to be appointed as Director has to provide his consent in Form DIR‐2 and such consent has to be filed by the Company with ROC in Form DIR‐12, within 30 Days of appointment.

Provisions related to DIN

Every individual intending to be appointed as director has to make an electronic application in Form DIR-3 to Central Government for allotment of DIN.

Qualification of Director

Declaration from Director at the time of appointment or reappointment in Form DIR‐8 , .Annual disclosure from Director has to be taken by the company.

Number of Directorship

It must be noted that no person can  be a director in more than 20 companies. Maximum number of public companies can be 10 (Director in Section-8 Co. and Dormant Director are not required to be considered for this purpose)

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Resignation by Director

Director has to intimate his resignation to the Company, which the Company has to file with ROC in Form DIR‐12 in 30 days. Company has to put resignation details on its website and in its Directors’ Report. This is necessary to avoid future cases by the director against him in future.

Return of Director and KMP

Return of Directors and KMP to be filed with ROC in Form DIR 12, within 30 days of appointment or change.

First Auditor

First Auditor of the company has to be appointed by the BOD within 30 days of Incorporation who has to hold the office till the conclusion of 1st AGM. In case of First Auditor, filing of ADT-1 is not mandatory. This is one of the serious compliances which is lacking in various newly floated companies.

Filing of Annual Return

Every company is required to file its Annual Return with Registrar of Companies within 60 days of Annual General Meeting in E-Form MGT-7. A company having turnover of INR 50 Crore or more has to be certified by a Practicing CS in Form MGT-8.

Filing of Financial Statements

Every Company is required to file its Financial Statements within 30 days of its Annual General Meeting with Registrar of Company in E-Form AOC-4. The same has to be digitally signed by one director and certified by CA/CS/Cost Accountant in Practice.

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Registers

Every Company has to keep and maintain following Registers in the specified format:

‐ Register of Members MGT-1

‐ Register of other Security Holders residing outside India MGT-3

– Register of Transfer and Transmission of Shares SH-6

– Register of Charge CHG-7

‐ Index of the Registers

Filing of Disclosure of interest by Directors

Every director at:

‐ First meeting in which he participates as director; or

‐ First meeting of Board in every FY; or

‐ Whenever there is change in disclosures

Have to  disclose in Form MBP‐1 (along with list of relatives and concern of relatives in the Company as per RPT definition), his concern or interest in any company, body corporate, firm or other association of individuals (including shareholding interest).

Form MBP‐1 has to be kept in the records of the company. This is very serious in the present scenario where MCA is getting stricter with related party transactions.

Resident Director

Every Company is required to appoint at least one Director who has stayed in India for a total period of not less than 182 days in the previous calendar year.

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Directors’ Report

Directors’ Report is to be filed within 30 days of AGM along with Form AOC-4. It should be signed by the “Chairperson” authorized by the Board, where he is not so authorized by at least 2 Directors.

Annual General Meeting

Every Company is required to hold an Annual General Meeting on or before 30th September every year during business hours (9 am to 6pm), on a day that is not a public holiday and either at the registered office of the Company or within the city, town or village where the registered office is situated. A 21 clear days’ notice is required to be given for the same.

Regularisation of Additional Director

If company wants to appoint additional director as director, then it has to regularize the person as director in General Meeting by passing Shareholder Resolution. File form DIR-12 for Change in Designation of Director along with ordinary resolution within 30 days of AGM.

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