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Post Incorporation Compliances for a Private Limited Company

Post Incorporation Compliances for a Private Limited Company

Private limited companies are regulated by the Companies Act and need to follow certain legal procedures to register the company. In addition, once incorporated, there is a set of strict compliances that every company has to follow.

Following are the significant actions which need to be taken post company incorporation:


1) Opening Bank Account in Company Name

After incorporation of Company, it is necessary to open a Current Account in the name of the Company with any Bank in India. All the transactions in the name of the Company should be transacted through the Company Bank Accounts only.

The following are the documents and details required for opening a Current Account with a bank:

  • Certificate of Incorporation of the Company.
  • Copies of Company Incorporation documents such as Memorandum and Articles of Association of the Company.
  • Permanent Account Number(PAN) of the Company.
  • Board Resolution of Opening and operation of Bank Account.
  • KYC details for Directors and Shareholders of the Company.
  • Cheque for initial deposit of amount to open Bank account.

2) Filing Verification of Registered Office (Form INC-22) 

If the company was registered with a temporary address while filing SPICe Form INC-32,the details of permanent registered office has to be filed filing of INC-22 for Verification of its Registered office IN Form INC-22 within 30 days of company registration.

3) Meeting of the Board of Directors

The Board of Directors is one of the most powerful bodies in a company. In any organization, the first board meeting has to be conducted within 30 days of its incorporation. There needs to be conducted a minimum of four board meetings in a calendar year, that is, at least one in every quarter. The gap between two consecutive meetings should not exceed 120 days. In the case of small companies with turnover not more than two crores, a minimum of two meetings must be held in a financial year. Important decisions related to the company are agreed upon in the board meeting.

4) Books and Accounts of Company

As per section 128, every company shall maintain proper books of accounts which shall represent an accurate and fair view of the state of affairs of the company. The double entry system shall be followed and the accounting is done on an accrual basis.

5) Appointment of First Auditors by Company

The Board of Directors of the Company have to appoint a Chartered Accountant who hold a valid certificate of practice as the First Auditor of Company within 30 days from the date of registration of the company.

In case the Board fails to appoint the first auditor within the timeline, the shareholders have appointed the first auditor at an extraordinary general meeting. The first auditor appointed by the Board Meeting or General Meeting shall hold office till the conclusion of the first annual general meeting.

6) Shop and Establishment Registration

Post incorporation compliance for private limited company, the next important step is obtaining shop act license immediately. Shop Act is state Government registration. Within 30 days of registration company shall obtain shop Act registration. The basic documents for obtaining shop act license is MOA, AOA, COI, Directors KYC documents etc. This registration have details such as company name, address, activity, number of employees, registration date etc.

7) Professional Tax Registration – Employer & Employee

Every Company is required to obtain Professional Tax – Employer Registration (Enrolment Certificate) within 30 days of incorporation. This again is a state specific labour registration mandatory for all registered business whether you have any employees or not. This registration is subject to renewal every year after payment of prescribed fee. Delay in obtaining the registration will attract penalty to business on yearly basis..

The Employer must deduct the Professional Tax from the salary of employee and pay to the State Govt. on monthly basis.


8) Infusion of Initial Capital by Subscribers to Memorandum

The subscribers to the Memorandum of Company have to bring the amount of subscribed   capital as stated in the Memorandum of Association at the time of company registration within 60 days of incorporation.

There are no explicit conditions in Companies Act as to this time limit 60 days for bringing the capital. However, the company is required to issue share certificate to the shareholders within 60 days of incorporation. In order to comply requirements of issue of share certificates in time, it is advisable to bring the subscribed capital with 60 days of incorporation. 

Infusion of capital to the Company bank account should happen preferably from the respective shareholders account. Also, the shareholder has to bring the entire amount of subscribed capital as stated in the Memorandum of Association.

In case of LLP, there is no time prescribed for capital infusion. However, we advise to bring the capital to the bank account before starting any activity or before closure of first financial year.

9)  Issue of Share Certificate to the Subscribers of MOA

According to section 56 of the Companies Act, 2013, the Company must issue share certificates to all the subscribers of the Company within 60 days from the date of incorporation of the company. The certificate must contain the following:

  • Number of share certificate
  • Face value of the share
  • Number of shares purchased
  • Name of the subscriber
  • Amount received
  • Kind of shares like preference or equity.

10) Filing of annual returns after company registration

Every company should mandatorily prepare its annual return with Registrar of companies or ROC within 60 days of annual general meeting in MGT-7 that has to be signed by at least one director and certified by a Company Secretary in practice.

If a private company fails to comply with the rules mentioned under the Act, every person who is responsible for the fault will be punishable with a fine.


11) Commencement of Business by Company 

Company has to file a declaration of Commencement of Business By Company with the Registrar of Companies that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of such declaration.

This declaration has to be filed by the company within a period of 180 days of the date of incorporation of the company in Form INC 20A

Company can commence its business operation only after filing the declaration of Commencement of Business with Registrar of Companies.

If a company makes any default in complying with the above requirements, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.

Also, if the company has not filed the declaration within a period of 180 days of the date of incorporation of the company, the Registrar may initiate action for the removal of the name of the company from theregister of companies on the reasonable belief that the company is not carrying on any business or operations. 


12) Goods and Services Tax (GST) Registration

Every business with annual turnover exceeds Rs. 40 lakhs or Service provider’s 20 lakhs is required to GST Registration under Goods and Services Tax (GST). However Company can apply Shop Act Registration suomoto. In most of cases where company dealing with MNC companies they demand GST registration number. As a business need Company can apply for GST Registration

13) Trademark Registration

Ultimate protection for a business name is secured only by Trademark Registration.

If the Trademark is used for goods and services under different classes, separate applications are required to be filled under each class to get protection of trademark for the respective goods and services.

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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