Post Incorporation Compliance of Private Limited Companies

Post Incorporation Compliance of Private Limited Companies. With Incorporation or Registration of Private Limited Company in India, many other Registration or approval getting through single process of Registration. The government has introduced several initiatives such as the Ease of Doing Business (EODB) program, which aims to simplify the regulatory framework and reduce the compliance burden on businesses. Under this program, various registrations and approvals are being integrated into a single window system, which enables businesses to apply for multiple registrations and approvals through filing single application through online portal of MCA.
Ministry of Corporate Affairs through the introduction of the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) portal, which enables businesses to apply for various registrations and approvals such as PAN, TAN, GSTIN, EPFO, ESIC and GST registration, among others, through a single online application during Private Limited Company Registration Process.
                          
Incorporation is one process to get the Registration Certificate but post incorporation many other mandatory compliances need to be done. post-incorporation start-ups in India should prioritize the mandatory compliances or Statutory Compliances required under the Companies Act.
In addition to these mandatory compliances, startups should also focus on other important compliances such as Statutory Compliances like maintaining proper books of accounts, conducting regular board meetings and annual general meetings, and filing annual returns and income tax returns on time.
¶ Bonus Points: Startups should ensure that they adhere to these compliances to avoid penalties, fines, and legal repercussions, and to maintain their legal and regulatory compliance. Once a company is incorporated in India, there are various post-incorporation compliances that need to be fulfilled. After the incorporation of a company in India, there are several post-incorporation compliances that the company needs to adhere to. These compliances are mandatory in nature and failure to comply with them can result in penalties and legal consequences. 
Some of the below post-incorporation compliance in India after a Private Limited Company Registration:-
                                        
» Record of First Directors/Promoters: After the incorporation of the company, the first Board Meeting needs to be held to record of the directors/promoters of the company. The Board Meeting needs to be held within 30 days of the date of incorporation.
»  Appointment of Auditor: Within 30 days of incorporation, the company must appoint a statutory auditor in Board Meeting under section 139 of the Companies Act 2013. The appointment of the first auditor must be intimated to the ROC within 15 days of the appointment through the filing of the ADT-1 form.
» Commencement of Business in form INC-20A: Company must file a declaration of commencement of business with the ROC within 180 days from the date of incorporation.
»  Maintain Statutory Registers and records: Maintaining statutory registers and records is a crucial aspect of corporate governance and compliance for any company, as it helps to ensure that the company complies with the various legal and regulatory requirements under the Companies Act, 2013. The company must maintain a Register of Share Certificates, which should contain details of the share certificate, including the name of the shareholder, the number of shares held, the distinctive number of shares, the date of issue, and the details of the directors who signed the share certificate.
»  Conduct Board Meetings: The company must conduct a minimum of four board meetings every year, with a maximum gap of 120 days between two meetings. But in case of Small /Startup companies, as defined under the Companies Act, 2013, are exempted from certain compliance requirements, including the requirement to hold two Board Meetings in a quarter. They only required to hold at least one Board Meeting in each half of the calendar year, with a gap of at least 90 days between the two meetings. It is important for small companies and start-ups to conduct Board Meetings in a timely and proper manner, as it helps to ensure good corporate governance and compliance with the relevant laws and regulations. Failure to do so can result in penalties and legal consequences. Appoint your Consultant to Compliance Calendar LLP having team of qualified and experienced Company Secretary or a Chartered Accountant to ensure that the company complies with the statutory requirements and conducts Board Meetings in a proper manner.
»  Issuance of Share Certificates: After incorporation of the company, Board needs to issue share certificates to its 1st shareholders/Promoters of the company within 60 days from of the date of incorporation.
»  Filing of financial statement & Annual Returns with the ROC: all companies in India needs to file its financial statement in form AOC-4 and Annual Returns in Form MGT-7/7A with the Registrar of Companies (RoC) every year. The Annual Return provides details about the company's directors, shareholders, and other key information related to change.
»  Filing of Income Tax Returns: The company needs to file its Income Tax Returns with the Income Tax Department every year. The startup company is required to pay various taxes, such as income tax, goods and services tax (GST), and other applicable taxes, as per the relevant laws.
»  Conducting Annual General Meeting (AGM): The company needs to conduct its AGM every year, where the company's directors and shareholders discuss various matters related to the company like Financial Position or company's financial statements adoption, Appointment/Re-appointment of Auditor/Director, Dividend if any etc. including to discuss other important matters related to the company's affairs with its shareholders. The AGM should be held within six months from the end of the financial year. For example, if the financial year ends on March 31, the AGM should be held on or before September 30 of the same year. 
The agenda of the AGM should include the following:-

Approval of the minutes of the previous AGM

Adoption of the audited financial statements for the financial year by shareholders

Declaration of dividend, if any

Appointment/Re-appointment of directors or auditors, if required

Any other business that may be brought up by the members.

¶ Bonus Points: It is important for companies to conduct AGMs in a timely and proper manner, as it helps to ensure good corporate governance and compliance with the relevant laws and regulations. Failure to do so can result in penalties and legal consequences.
»  Maintenance of Books of Accounts: As per the Companies Act, 2013, every company is required to maintain proper books of accounts and prepare financial statements on an annual basis at registered Office or at such other place as may be approved by the Board of Directors. The financial statements include a balance sheet, profit and loss account, and a cash flow statement. Company needs to maintain its books of accounts, which includes records of all financial transactions of the company. AOC-5 Needs to be file if books of accounts kept at any other place other than registered Office place. 
»  E-Stamping of Share Certificates (under State Stamp Act, 1899): As per the Indian Stamp Act, 1899, share certificates issued by a company are required to be stamped. The stamp duty on share certificates varies from state to state and is governed by the respective State Stamp Acts. To avoid the hassle of physical stamping, most states have introduced e-stamping, which is an electronic way of paying stamp duty. E-stamping is a secure and efficient way of paying stamp duty on share certificates.
To e-stamp share certificates, the company needs to register itself on the website of the respective State Treasury or authorized banks, where it can generate the e-stamp certificate by providing details of the shares issued and the corresponding stamp duty payable. The e-stamp certificate can then be affixed to the share certificate and submitted to the shareholders. It is important to note that non-payment of stamp duty on share certificates can lead to penalties and legal consequences. 
»  Compliance with Other Laws: Apart from the Companies Act, 2013, a startup company must also comply with other applicable laws, such as the Income Tax Act, 1961, and the Goods and Services Tax Act, 2017 including labor laws, environmental laws, and competition laws etc.
Today in this Article we will learn about the mandatory compliances post incorporation for Private Limited company - filing the INC-22 form(if applicable) and INC-20A form online with MCA
» INC-22 (Situation of Registered Office): INC-22 is a form that needs to be filed with the Registrar of Companies (ROC) in India, as per the Companies Act, 2013. It is used to inform the ROC about the situation of the registered office of a company. At the time of incorporation, the correspondence address has been shown instead of the registered office address, the company needs to select the option to file INC-22 within 30 days post incorporation, along with the requisite documents.
The INC-22 form requires the following details to be provided:-

Utility bill for Address Proof of the registered office of the company

Proof of address of the registered office may include a rental agreement, lease agreement, or sale deed, NOC if any along with the latest utility bill in the name of the owner of the property or the company.

INC-22 form now requires companies to provide pictures of the registered office building, showing at least one director or key managerial personnel who is present at the registered office and holding a placard with the name of the company, date of incorporation, and CIN (Corporate Identity Number)- This requirement has been introduced to ensure that the registered office address provided by the company is genuine and can be verified by the Registrar of Companies (RoC). The pictures of the building should clearly show the entrance of the building, the nameplate of the company, and the surrounding area.

Email ID and Contact belonging to the company

¶ Bonus Points: Private Limited company should ensure that the details provided in the INC-22 form are accurate and up-to-date to avoid any penalties or legal repercussions. Start-ups can seek Compliance Calendar LLP help or guidance to ensure that all the compliances are met in a timely and accurate manner.
• INC-20A: This form, also known as the "Declaration for the Commencement of Business" form, must be filed by all companies post incorporation within 180 days. INC-20A is a form that is required to be filed by a newly incorporated company within 180 days of incorporation, to declare that it has commenced its business operations and has received the paid-up share capital from its shareholders. It is a mandatory compliance requirement under the Companies Act, 2013.
⇒ The INC-20 form is required to be filed within 180 days from the date of incorporation of the company after to be certified by Professionals.
⇒ As per Section 10A of the Companies Act, 2013, a company cannot commence any business or borrow money unless it has filed a declaration of commencement of business with the Registrar of Companies (ROC) through the filing of INC-20A form
⇒ In the INC-20A form, the company needs to provide details such as the date of incorporation, the registered office address, the authorized and paid-up share capital, and the details of the subscribers to the memorandum long with proof of payment.
⇒ Banks and financial institutions usually ask for a copy of the INC-20A form before sanctioning any loan or credit facility to the company. This is because the form provides evidence that the company has commenced its business operations and has received the paid-up share capital from its shareholders. In the absence of a valid INC-20A form, banks and financial institutions may not consider the company as eligible for any loan or credit facility. Therefore, it is important for a newly incorporated company to file the INC-20A form within the specified time frame and maintain proper records of the same to avoid any financial or legal consequences.
⇒ Filing the INC-20A form is crucial as it ensures that the company has started its business operations and that the subscribers to the memorandum have fulfilled their obligation of paying the subscribed share capital. It also helps in maintaining the compliance status of the company and avoiding any penalties or fines for non-compliance.
¶ Bonus Points: Non Filing of INC-20A, ROC can proceed for the closure of the Private Limited Company on the grounds mentioned under Section 248(1)(d) of the Companies Act, 2013. Section 248(1)(d) states that a company may be struck off the register of companies if it has not commenced business and failed to file the declaration in form INC-20A and has not applied for obtaining the status of a dormant company under Section 455 of the Companies Act, 2013. It is important to note that striking off of the name of a company under Section 248(1)(d) does not absolve the company or its directors from any liability that may have arisen before the striking off. Therefore, it is important for the company and its directors to ensure that all compliance and obligations have been fulfilled before initiating the process of striking off.
Conclusion:
Both of these forms can be filed online through the MCA portal. It is important to file these forms within the specified time frame to avoid penalties and legal consequences. Post-incorporation compliances of Private Limited company in India are mandatory and failure to comply with them can result in penalties and legal consequences. Companies should ensure that they adhere to all the necessary compliances to avoid any legal issues. It is essential to ensure that the company complies with all the post-incorporation compliance under the Companies Act 2013 to avoid any legal and financial penalties.
Choose Compliance Calendar for Post Incorporation Compliance

With Incorporation or Registration of Private Limited Company in India, many other Registration or approval getting through single process of Registration. The government has introduced several initiatives such as the Ease of Doing Business (EODB) program, which aims to simplify the regulatory framework and reduce the compliance burden on businesses. Under this program, various registrations and approvals are being integrated into a single window system, which enables businesses to apply for multiple registrations and approvals through filing single application through online portal of MCA.

Ministry of Corporate Affairs through the introduction of the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) portal, which enables businesses to apply for various registrations and approvals such as PAN, TAN, GSTIN, EPFO, ESIC and GST registration, among others, through a single online application during Private Limited Company Registration Process.

Incorporation is one process to get the Registration Certificate but post incorporation many other mandatory compliances need to be done. post-incorporation start-ups in India should prioritize the mandatory compliances or Statutory Compliances required under the Companies Act.

In addition to these mandatory compliances, startups should also focus on other important compliances such as Statutory Compliances like maintaining proper books of accounts, conducting regular board meetings and annual general meetings, and filing annual returns and income tax returns on time.

¶ Bonus Points: Startups should ensure that they adhere to these compliances to avoid penalties, fines, and legal repercussions, and to maintain their legal and regulatory compliance. Once a company is incorporated in India, there are various post-incorporation compliances that need to be fulfilled. After the incorporation of a company in India, there are several post-incorporation compliances that the company needs to adhere to. These compliances are mandatory in nature and failure to comply with them can result in penalties and legal consequences.

Some of the below post-incorporation compliance in India after a Private Limited Company Registration:-

» Record of First Directors/Promoters: After the incorporation of the company, the first Board Meeting needs to be held to record of the directors/promoters of the company. The Board Meeting needs to be held within 30 days of the date of incorporation.

» Appointment of Auditor: Within 30 days of incorporation, the company must appoint a statutory auditor in Board Meeting under section 139 of the Companies Act 2013. The appointment of the first auditor must be intimated to the ROC within 15 days of the appointment through the filing of the ADT-1 form.

» Commencement of Business in form INC-20A: Company must file a declaration of commencement of business with the ROC within 180 days from the date of incorporation.

» Maintain Statutory Registers and records: Maintaining statutory registers and records is a crucial aspect of corporate governance and compliance for any company, as it helps to ensure that the company complies with the various legal and regulatory requirements under the Companies Act, 2013. The company must maintain a Register of Share Certificates, which should contain details of the share certificate, including the name of the shareholder, the number of shares held, the distinctive number of shares, the date of issue, and the details of the directors who signed the share certificate.

» Conduct Board Meetings: The company must conduct a minimum of four board meetings every year, with a maximum gap of 120 days between two meetings. But in case of Small /Startup companies, as defined under the Companies Act, 2013, are exempted from certain compliance requirements, including the requirement to hold two Board Meetings in a quarter. They only required to hold at least one Board Meeting in each half of the calendar year, with a gap of at least 90 days between the two meetings. It is important for small companies and start-ups to conduct Board Meetings in a timely and proper manner, as it helps to ensure good corporate governance and compliance with the relevant laws and regulations. Failure to do so can result in penalties and legal consequences. Appoint your Consultant to Compliance Calendar LLP having team of qualified and experienced Company Secretary or a Chartered Accountant to ensure that the company complies with the statutory requirements and conducts Board Meetings in a proper manner.

» Issuance of Share Certificates: After incorporation of the company, Board needs to issue share certificates to its 1st shareholders/Promoters of the company within 60 days from of the date of incorporation.

» Filing of financial statement & Annual Returns with the ROC: all companies in India needs to file its financial statement in form AOC-4 and Annual Returns in Form MGT-7/7A with the Registrar of Companies (RoC) every year. The Annual Return provides details about the company's directors, shareholders, and other key information related to change.

» Filing of Income Tax Returns: The company needs to file its Income Tax Returns with the Income Tax Department every year. The startup company is required to pay various taxes, such as income tax, goods and services tax (GST), and other applicable taxes, as per the relevant laws.

» Conducting Annual General Meeting (AGM): The company needs to conduct its AGM every year, where the company's directors and shareholders discuss various matters related to the company like Financial Position or company's financial statements adoption, Appointment/Re-appointment of Auditor/Director, Dividend if any etc. including to discuss other important matters related to the company's affairs with its shareholders. The AGM should be held within six months from the end of the financial year. For example, if the financial year ends on March 31, the AGM should be held on or before September 30 of the same year.

The agenda of the AGM should include the following:-

Approval of the minutes of the previous AGM
Adoption of the audited financial statements for the financial year by shareholders
Declaration of dividend, if any
Appointment/Re-appointment of directors or auditors, if required
Any other business that may be brought up by the members.

¶ Bonus Points: It is important for companies to conduct AGMs in a timely and proper manner, as it helps to ensure good corporate governance and compliance with the relevant laws and regulations. Failure to do so can result in penalties and legal consequences.

» Maintenance of Books of Accounts: As per the Companies Act, 2013, every company is required to maintain proper books of accounts and prepare financial statements on an annual basis at registered Office or at such other place as may be approved by the Board of Directors. The financial statements include a balance sheet, profit and loss account, and a cash flow statement. Company needs to maintain its books of accounts, which includes records of all financial transactions of the company. AOC-5 Needs to be file if books of accounts kept at any other place other than registered Office place.

» E-Stamping of Share Certificates (under State Stamp Act, 1899): As per the Indian Stamp Act, 1899, share certificates issued by a company are required to be stamped. The stamp duty on share certificates varies from state to state and is governed by the respective State Stamp Acts. To avoid the hassle of physical stamping, most states have introduced e-stamping, which is an electronic way of paying stamp duty. E-stamping is a secure and efficient way of paying stamp duty on share certificates.

To e-stamp share certificates, the company needs to register itself on the website of the respective State Treasury or authorized banks, where it can generate the e-stamp certificate by providing details of the shares issued and the corresponding stamp duty payable. The e-stamp certificate can then be affixed to the share certificate and submitted to the shareholders. It is important to note that non-payment of stamp duty on share certificates can lead to penalties and legal consequences.

» Compliance with Other Laws: Apart from the Companies Act, 2013, a startup company must also comply with other applicable laws, such as the Income Tax Act, 1961, and the Goods and Services Tax Act, 2017 including labor laws, environmental laws, and competition laws etc.

Today in this Article we will learn about the mandatory compliances post incorporation for Private Limited company - filing the INC-22 form(if applicable) and INC-20A form online with MCA

» INC-22 (Situation of Registered Office): INC-22 is a form that needs to be filed with the Registrar of Companies (ROC) in India, as per the Companies Act, 2013. It is used to inform the ROC about the situation of the registered office of a company. At the time of incorporation, the correspondence address has been shown instead of the registered office address, the company needs to select the option to file INC-22 within 30 days post incorporation, along with the requisite documents.

The INC-22 form requires the following details to be provided:-

Utility bill for Address Proof of the registered office of the company
Proof of address of the registered office may include a rental agreement, lease agreement, or sale deed, NOC if any along with the latest utility bill in the name of the owner of the property or the company.
INC-22 form now requires companies to provide pictures of the registered office building, showing at least one director or key managerial personnel who is present at the registered office and holding a placard with the name of the company, date of incorporation, and CIN (Corporate Identity Number)- This requirement has been introduced to ensure that the registered office address provided by the company is genuine and can be verified by the Registrar of Companies (RoC). The pictures of the building should clearly show the entrance of the building, the nameplate of the company, and the surrounding area.
Email ID and Contact belonging to the company

¶ Bonus Points: Private Limited company should ensure that the details provided in the INC-22 form are accurate and up-to-date to avoid any penalties or legal repercussions. Start-ups can seek Compliance Calendar LLP help or guidance to ensure that all the compliances are met in a timely and accurate manner.

• INC-20A: This form, also known as the "Declaration for the Commencement of Business" form, must be filed by all companies post incorporation within 180 days. INC-20A is a form that is required to be filed by a newly incorporated company within 180 days of incorporation, to declare that it has commenced its business operations and has received the paid-up share capital from its shareholders. It is a mandatory compliance requirement under the Companies Act, 2013.

⇒ The INC-20 form is required to be filed within 180 days from the date of incorporation of the company after to be certified by Professionals.

⇒ As per Section 10A of the Companies Act, 2013, a company cannot commence any business or borrow money unless it has filed a declaration of commencement of business with the Registrar of Companies (ROC) through the filing of INC-20A form

⇒ In the INC-20A form, the company needs to provide details such as the date of incorporation, the registered office address, the authorized and paid-up share capital, and the details of the subscribers to the memorandum long with proof of payment.

⇒ Banks and financial institutions usually ask for a copy of the INC-20A form before sanctioning any loan or credit facility to the company. This is because the form provides evidence that the company has commenced its business operations and has received the paid-up share capital from its shareholders. In the absence of a valid INC-20A form, banks and financial institutions may not consider the company as eligible for any loan or credit facility. Therefore, it is important for a newly incorporated company to file the INC-20A form within the specified time frame and maintain proper records of the same to avoid any financial or legal consequences.

⇒ Filing the INC-20A form is crucial as it ensures that the company has started its business operations and that the subscribers to the memorandum have fulfilled their obligation of paying the subscribed share capital. It also helps in maintaining the compliance status of the company and avoiding any penalties or fines for non-compliance.

¶ Bonus Points: Non Filing of INC-20A, ROC can proceed for the closure of the Private Limited Company on the grounds mentioned under Section 248(1)(d) of the Companies Act, 2013. Section 248(1)(d) states that a company may be struck off the register of companies if it has not commenced business and failed to file the declaration in form INC-20A and has not applied for obtaining the status of a dormant company under Section 455 of the Companies Act, 2013. It is important to note that striking off of the name of a company under Section 248(1)(d) does not absolve the company or its directors from any liability that may have arisen before the striking off. Therefore, it is important for the company and its directors to ensure that all compliance and obligations have been fulfilled before initiating the process of striking off.

Conclusion:

Both of these forms can be filed online through the MCA portal. It is important to file these forms within the specified time frame to avoid penalties and legal consequences. Post-incorporation compliances of Private Limited company in India are mandatory and failure to comply with them can result in penalties and legal consequences. Companies should ensure that they adhere to all the necessary compliances to avoid any legal issues. It is essential to ensure that the company complies with all the post-incorporation compliance under the Companies Act 2013 to avoid any legal and financial penalties.