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Mandatory Compliances for a Private Limited Company in India

MANDATORY COMPLIANCES COMPANY SUGGESTION

Mandatory Compliances for a Private Limited Company in India

Private Limited Company is the main type of starting of business at initial stage. But once your business is started various Mandatory Compliances for a Private Limited Company in India required to be followed :-

Companies mandatory compliance is to Maintain day to day operation of business along with complying the corporate laws. Hence, it is essential to take help of a professional and also understand such legal requirements to ensure timely fulfilment of compliances, without any levy of interest or penalty.

Compliances of company law may be divided into 2 parts for making it easy to understand Mandatory Compliances and Event Based Compliances.

Followings are the mandatory complains: –

Mandatory Compliances

1.Name Board of company

Most important and mandatory compliance is to paint or affix the name and address of registered office and same painted and affixed outside every office or place in which business of company is carried on. The name and address affixed must be in legible letters.

2.Companies latter head

Every Company shall get its name, address of registered office, CIN, telephone and email printed on all business letters, billheads, letter papers.

3.Meeting of Board of Directors

After incorporation of company first Board of Directors meeting is required to be held within 30 days. At least 7 days before the meeting a notice of meeting is to be send to every director of the Company.

4.Subsequent Board Meetings

Every year company must hold Minimum 4 Board Meetings with not more than 120 days gap between two meetings. In case of small company, it is sufficient to conduct only two Board Meetings.

5.Share Certificate

Subscription of memorandum is necessary after incorporation. After subscription pf memorandum Company is required to issue Share Certificates to the subscribers of memorandum within 60 days of incorporation of company.

6.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

shall 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 shall be kept in the records of the company.

7.Resident Director

Minimum director requirement for every company is 2 but 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.

8.Alteration in MOA and AOA

Every alteration of Articles and Memorandum required special resolution. And every alteration shall be filed with Registrar together with copy of altered Articles, notice of meeting and SR within 30 days of passing Special Resolution. Every alteration made in MOA and AOA shall be noted in every copy thereof.

9.Registers

Every Company has many persons in it and for maintaining all these persons company shall 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 CHS-7

‐ Index of the Registers

10.Other Registers

Following registers (point no.9) are important in nature but after these registers Company shall keep at its Registered Office, a Register of Directors and KMP in the prescribed format containing prescribed particulars.

11.Resolution

‐ Copy of every resolution (with explanatory statement, if any) or Agreement for the specified matters to be filed with ROC in Form MGT‐14 within 30 days.

‐ Articles of Company shall have copy of resolution effecting amendment in AOA and Agreements referred in Section 117(3) of the Act

12.Minutes of Meeting

Minutes of every meeting shall be prepared and kept within 30 days of conclusion of every meeting concerned (general meeting, board meeting, creditors meeting and committee meeting).

‐Minutes of meeting includes all important points discussed e.g. all appointments, date wise meeting, alterations.

13.Director’s Appointment

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

14.DIN related provisions

Every individual intending to be appointed as director shall have Director Identification Number (DIN), for that they have to make an electronic application in Form DIR-3 to Central Government for allotment of DIN.

15.Qualification of Director

Before appointment of director company has to check his qualification, which is necessary for appointment. At the time of appointment and reappointment declaration from Director is required in Form DIR‐8. Annual disclosure from Director to be taken.

16.Number of Directorship

A person shall be a Director maximum in 20 companies but director in public company number of directorships is only 10 (Director in Section-8 Co. and Dormant Director not to be included).

17.Resignation by Director

In case of resignation of Director, Director shall intimate his resignation to the Company, which the Company shall file with ROC in Form DIR‐12 in 30 days. And Company also put resignation details on its website and in its Directors’ Report.

18.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.

19.Meeting, at shorter notice

If company has urgent matters than Meeting can be convened on a shorter notice. Consent from not less than 95% of members entitled to vote thereat

20.Quorum

Quorum shall be: –

a .one‐third or

b. two directors, whichever is higher.

Directors participating through Video Conferencing shall be counted for the purpose of quorum.

21.First Auditor

Company has to appointment First Auditor of the company shall by the BOD within 30 days of Incorporation who shall hold the office till the conclusion of 1st AGM. In case of First Auditor, filing of ADT-1 is not mandatory.

22.Subsequent Auditor

The BOD shall appoint the auditor in first AGM of company who shall hold the office till the conclusion of 6th AGM and shall inform the same to ROC by filing ADT-1. The responsibility to file Form ADT 1 is that of the company and not of the auditor within 15 days from the date of appointment.

23.Ratification of Auditor

Ratify the appointment of Auditor will be on shareholders. Shareholders ratify the appointment in every AGM but there is no need to file ADT-1 for ratification.

24.Casual Vacancy of Auditor

If auditor resign than a Casual Vacancy is arise, it shall be filled within 30 days of BOD meeting, subject to approval in General Meeting (AGM or EGM). Any auditor appointed in a Casual Vacancy shall hold office until the conclusion of the next Annual General Meeting.

If the auditor resigns the company a resignation letter must be file in Form ADT-3 with the registrar within 30 days from the date of resignation. Filing form ADT-3 is the responsibility of the auditor and can only be filed if ADT-1 of the relevant auditor filed.

25.Annual General Meeting

Every Company is required to hold an Annual General Meeting on or before 30th September every year. Following condition must be satisfied by company during AGM: –

A.AGM must be hold during office hours (9 am to 6pm),

B.The day not a public holiday 

C.AGM should be hold either at the registered office of the Company or within the city, town or village where the registered office is situated.

D. A 21 clear days’ notice is required to be given for the same.

26.Financial Statements

Within 30 days of its Annual General Meeting every company is required to file its financial statement with Registrar of Company in E-Form AOC-4. The same shall be digitally signed by one director and certified by CA/CS/Cost Accountant in Practice.

27.Filing of Annual Return

Annual Return of company required to be filed 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 shall be certified by a Practicing CS in Form MGT-8.

28. Directors’ Report

Under Section 134 all the information required for Small Company filed with directors’ report 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.

CS Deepa Sharma

Author is a associate member of the Institute of Company Secretaries of India (ICSI) and apart from that she holds LLB degree and Master in Commerce degree from Rajasthan University. She is having over 5 years of experience as a Practicing Company Secretary. She is well versed with all the matters related to Company Law and ROC matters, RERA , statutory reporting, Compliance Report and Corporate Governance. She is having good exposure in maintaining secretarial records as prescribed under Companies Act, 2013.


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