POST INCORPORATION COMPLIANCES BY PVT LTD COMPANY
Introduction
Incorporation of private limited company brings along few mandatory compliances to be carried
out after its incorporation. These compliances need to be carried out within
specified time period after incorporation. However, these Post Incorporation
Compliances are not that much burdensome in nature and are very basic. Let us
discuss what needs to be done after incorporation.
1) Hold a BM:
After incorporation of company, the board of
directors is required to call for board meeting within 30 days of its
incorporation and take necessary decision in this meeting. These decisions
includes the bank in which the company wants to open the account, issuance of
share certificates, appointment of auditor and any other transactions on which
the consent of board members is necessary. The directors can attend meeting
either in person or through video conferencing. A private limited company is
required to hold at least 4 board meetings in a year and the gap between two
consecutive meetings cannot be more than 120 days. Now a day, due to current
situation of pandemic, a company can do meetings through video conferencing
also.
2) Open a bank account:
The company is an artificial person in the
eyes of law and thus it requires to have bank account in its own name. The
directors of company cannot do business through their personal bank accounts.
There must be a separate bank account in the name of company to carry out
business transactions of company.
3) File Form 20A- Commencement of
business:
A company cannot start doing business
immediately after getting incorporation certificate. The shareholders of
company, who have acquired the share of company, are required to deposit
their subscription money into the bank account of company within 180 days from
the incorporation of company. It is the duty of company to file Form 20A to the
concerned ROC intimating that all the shareholders have deposited their
subscription money. This form is called declaration of commencement of
business. A company can start doing business only after filing of this form.
4) Appointment of first auditor:
Every private limited company is required to
appoint their first auditor within 30 days from its incorporation. This auditor
shall be appointed by board of directors. Filing of form ADT-1 intimating ROC
about appointment of auditor is not compulsory in the case of first auditor.
The first auditor appointed shall hold his office till the conclusion of 1st
Annual General Meeting. In the 1st AGM, the company shall appoint
subsequent auditor for 5 years who shall hold the office as an auditor till the
conclusion of 6th AGM. The company is required to file Form ADT-1 within 15 days from its appointment.
5) Issuance of share
certificate:
The company is required to issue share
certificates in Form SH-1 to its shareholders within 60 days from its
incorporation. For any subsequent allotment of share, the company is required
to issue share certificate within 60 days from the date of allotment.
Conclusion
The above mentioned Post Incorporation
Compliances are mandatory compliances that needs to be carried out after
incorporation of company. Above compliance enables the company runs its
business in a legitimate manner. To know the mandatory yearly compliances for
private limited company please refer to our next blog post.
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