Post Incorporation Company Compliances

Topics Covered –

What is Post-Incorporation Company Compliance?

Every company incorporated in India is required to obey the following mandates and is also required to file prescribed documents with the Registrar of Companies i.e. ROC every financial year.

The Registrar of Companies (ROC), an office underneath the Ministry of Corporate Affairs (MCA), deals with the administration of companies and Limited Liability Partnerships in India.

What are the Post Incorporation Company Compliances?

1. To Declare the commencement of business – Form 20A

All the companies registered on or after 2nd November 2018 are mandatorily required to file certificate of commencement of business with the respective ROC. For this, board of directors of the company has to declare the commencement of business by filing Form 20A within 180 days of the date of incorporation of company.

Penalty for Breach –

On Company – A company in default shall be liable to pay a penalty of Rs. 50,000.
On Officers – Every officer fails to comply this requirement shall be liable to a penalty of Rs. 1,000 per day for each day during which such default continues and such penalty shall be subjected to a maximum of Rs. 1,00,000.
Company Strike-off – the ROC is empowered to strike-off the name of the company from the Register of companies in case where he has a reason to believe that company is not carrying on any kind of business even after 180 days of its incorporation.

2. First Auditor – Section 139 (6)

It is mandatory for companies to appoint its first auditor in the first Board meeting. After appointment, the company has to communicate the appointment to Ministry of Corporate affairs in Form ADT-1 within 15 days from the date of the Board Meeting.

Penalty for Contravention – Section 147

On companies – If the company fails to comply with the Section 139(6) then it shall be liable to fine which shall not be less than Rs. 25,000 but which may extend up to Rs. 5,00,000.
On Officers – Every officer for such contravention be punishable with imprisonment for a term which may extend to 1 year or with fine which shall not be less than Rs. 10,000 but which may extend to Rs. 1,00,000 or with both.

*It is not mandatory to file Form ADT-1 with ROC in case of first auditor

3. Issue of Share Certificate – Section 56

The second essential Post Incorporation company compliance is the issue of share certificate. All the companies are required to issue share certificate in Form SH-1 within 2 months from the date of incorporation.

Penalty for Default

On companies – f a company fails to issue share certificate within 2 months from incorporation date then it shall be liable to fine which shall not be less than Rs. 25,000 but may extend up to Rs.5,00,000.
On Officers – Every defaulting officer shall also be liable to fine which shall not be less than Rs. 10,000 but may extend up to Rs. 1,00,000.

4. Registered Office – Section 12

The next requirement for the company is to have an official registered office within 15 days from the incorporation date. It is essential requirement as then the company will receive and acknowledge all notices and communications on such address.

Moreover, the company is required to furnish the verification of such registered office to the Registrar within 30 days from incorporation date.

5. First Board meeting – within 30 days – Section 173(1)

Thereafter, every company shall hold its first Board of Directors meeting within 30 days from the date of its incorporation.

6. First Annual General Meeting – Section 96

Every Company is required to hold its first Annual General Meeting within a span of 9 months from closing date of the first financial year of such company.

7. Open the Bank Account for the company-

In order to maintain the record of the financial transaction of the company, all the companies are required to open a Bank Account in the name of the company.

8. To maintain compulsory Statutory Registers –

The next legal requirement for all the companies is to maintain certain prescribed statutory registers in the prescribed manner and format. Such registers include

Register of members,
Register of Charges,
Board Meeting minutes,
Registration of directors,
Attendance Register, etc.

9. PAN and TAN

AS we all know company is an artificial person and is a separate legal entity. This is why every company is compulsorily required to have its own PAN and TAN for the registration of the company under the Income Tax Act, 1961. Here, PAN stands for Permanent Account Number and TAN stands for Tax deducted/collected at source.

10. Company Details

The registered corporate body is required to present the important details outside their office and on their business collaterals like letterheads, billheads, and other official documents.

Company’s name
Corporate Identification Number
Registered office address
Official phone number
Website, email Id & Fax No.

11. Office Board Name –

It is also compulsory for every company to have its Name Board outside its registered office whereby following details shall be displayed –

Company’s name,
Company’s identification Number,
Phone number,
E-mail address,
Website address,
Registered office Address, etc.

12. Disclosure of Interest (MBP-1) – Section 184

According to Section 184 of the Companies Act, 2013, Every Director of the registered entity is required to submit a disclosure of interest in every other registered entity in Form MBP-1. This disclosure is mandatory by all the Directors and is required to be filled in the first Board Meeting.

13. Directors Appointment Declaration (DIR-2) – Section 152(5)

A Director needs to provide a declaration for Appointment and Qualification in Form DIR-2. This is the consent to act as a director of the proposed company.

It contains the following details – DIN/ PAN, Name, Address, Contact Details, Occupation Details of each Director of a corporation.

List of Post-Incorporation Company Compliances, Applicable Form 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 1st financial year	N.A.
Director Disclosure – Interest of Director in other companies	MBP-1	In the 1st Board Meeting	No This is to be kept in the Company’s record

Conclusion

These Company Compliances are technical in nature thus only a person wo is well versed with such requirements and provision can fulfill them. This is why, it becomes a tough task for all the companies to obey thereto timely. So, it is always suggested to take assistance from experts’ team. If you are also looking for a Professionals’ team who can observe such compliances timely on your behalf without levy of any fine or penalty then Manthan Experts is the right platform.

You can contact us for immediate assistance.