“Company Compliances” – A brief Discussion

“Cost of Non-Compliance of Legal Provisions is always more than the Cost of Compliance”

With the introduction of Companies Act, 2013, running a business is not an easy process. As Companies are required to fulfill numerous Company Compliances prescribed under the Companies Act.

This article will help you to understand major Company Compliances in Brief –

Topics Covered –

What is Company?

Before learning about Company Compliances, one should know “What is Company”. In a layman language, when a group of persons forms a legal entity to work together in order to achieve a common goal, such legal entity is called a Company.

In India, the Companies Act, 2013 is the leading law dealing with the Incorporation, Running and Closure of the companies.

Section 2(20) of the Companies Act, 2013 defines company as follows:

“A Company Incorporated under this Act or under any previous Company law”

Conclusively, a Company is a legal entity formed by group of individuals to operate certain business and is registered under the Companies Act, 2013.

Company Compliances

The Compliance stands for “The action of complying with a command,” or “the state of meeting rules or standards.”

For a Company, Compliance is the process of making sure that Company and its employees follow all laws, regulations and standards that apply to such Company through Companies Act, 2013.

A company is also required to file prescribed documents with the Registrar of Companies (ROC) from time to time.

ROC is office underneath the Ministry of Corporate Affairs (MCA), deals with administration of Companies and LLPs registered in India.

If a company fails to comply with the applicable “Company Compliances Provisions”, then it will have to bear heavy cost. ROC is empowered to take strict actions against Company and its Key Managerial Personnel.

So, it’s better for each company to comply with all the Compliances to avoid penalties or additional fees thereto.

Type of Company Compliances for Private Limited Company

We can categorize the type of Company Compliances broadly as under:

Post Incorporation Company Compliances.
Mandatory Annual Compliances.
Event Based Compliances.

Post Incorporation Company Compliances –

As soon as a Company is incorporated, it shall be legally bound to comply the Certain Legal Compliances.

Below is the list of Post-Incorporation Company Compliances, Applicable Form, if any and Respective Due Dates –

Post-Incorporation Company Compliances	Applicable Form	Time Limit	Whether to be filed before ROC or Not?
Declaration of commencement of business. (Applicable to companies incorporated after 2nd November 2018)	20A	Within 180 days of the date of Incorporation.	Yes
First Auditor Appointment	ADT-1*	Within 30 days from Incorporation of Company.	Yes *Not Mandatory in case of first Auditor.
Issue of Share Certificate	SH-1	Within 2 months from the date of Incorporation.	No This is to be kept in the Company’s record.
Stamp Duty Documents file to SDM	–	Within 30 days from date of issue of Share Certificate.	N.A.
First Board Meeting	–	Within 30 days from the date of its Incorporation.	N.A.
First Annual General Meeting	–	9 months closing date of the 1^st financial year.	N.A.
Director Disclosure – Interest of Director in other companies.	MBP-1	In the 1^st Board Meeting.	No This is to be kept in the Company’s record.

Mandatory Annual Compliances for Companies

Once Company is Incorporated and Post Incorporation Compliances has been made, then Annual Mandatory Compliances are to be complied.

Below is the list of Annual Company Compliances, Applicable Form, if any and Respective Due Date –

Annual Company Compliance	Applicable Form	Time Limit	Whether to be filed before ROC or Not?
Board Meetings	–	Minimum of 4 Board Meetings to be held every year with not more than 120 days gap within two meetings.	N.A.
Annual General Meetings	–	One Annual General Meeting should be held every year. The gap between 2 Annual general meetings must not be more then 15 months.	N.A.
Annual Return	MGT -7	Within 60 days from the date of AGM.	Yes
Financial Statements	AOC-4	Within 30 days from the date of AGM.	Yes
Appointment of Subsequent Auditors	ADT-1	Within 15 days from the date of appointment of the Auditor.	Yes
Any Company having outstanding loan/amount as on 31^st March of each F.Y. has to furnish details and bifurcation of such outstanding amount.	Form DPT-3	30^th June	Yes

Event-Based Compliances

After Incorporation Compliance & Mandatory Compliance, there are Certain Compliances, which needs to be fulfilled on Occurring of Particular Event. These are called Event Based Compliances.

Below is the list of Event Based Compliances, Applicable Form, if any and Respective Due Dates–

EVENTS	Form No.	Time – Limit	Whether to be filed before ROC or Not?
Change in the Address of Registered Office within Same State.	INC-22	Within 15 days from the date when the Board resolution approving such change was passed.	Yes
Change in the Directors and key managerial personnel	DIR-12	Within 30 days from the date of appointment/ resignation and of any change taking place in their designations.	Yes
Increase in Authorized Share Capital	SH-7	Within 30 days of the date of general meeting where the ordinary resolution was passed. Ordinary resolution is passed for Alteration of the MOA for increase in Authorized Capital.	Yes
Increase in Paid-Up Share Capital through private placement	PAS-3	Within 15 days from the date of the Allotment of Shares.	Yes
Resolution and Agreements	MGT-14	Within 30 days from the date of passing resolution and agreements.	Yes
Change in Secured Borrowing	CHG-1	Within 30 days of its Creation or Modification of charge.	Yes
Allotment of Shares	PAS-3	Within 30 days from the date of Allotment.	Yes
It is a one-time return for outstanding receipt of loan by a Company.	DPT-3	Due date was 31st of May 2019. Since then the form must be filed Annually.	Yes
Applicable on Specified Company, who obtains goods / services from the Small and Micro-enterprise. Payment from them is due for 45 days from the date of acceptance.	MSME-1	Within 30 days from the end of each half-year in respect of outstanding payments to Micro or Small Enterprise.	Yes
Disclosure of Substantial Beneficial Ownership	BEN-2	Within 30 days from the date of receipt of BEN1 by the company.	Yes
Additional place whereby the books of accounts and statutory registers are kept (other than the registered office)	AOC-5	Within 7 days from the date of passing the Board Resolution.	Yes
For Conversion of Private limited company into Public Company	INC-27	Within 15 days from of the receipt of the order from the Central Government.	Yes

Conclusion

Company Compliances are technical in nature so, it is always better to take help from Experts. If you require any assistance in company Compliance or any other related matter, Manthan Experts is available for assistance. Feel free to contact your Trustworthy Advisor at info@manthanexperts.com.