What Are The Compliances To Be Followed By A Private Limited Company? The private limited companies are obliged to comply with the provisions and regulatory filings prescribed by t Companies Act 2013. The non-compliance can result in the penalty or even striking off the company, dismissing the directors as well. The Private Limited Company is considered the most popular form of business...
Access the exclusive LEGAL ERAStories,Editorial and Expert Opinion
What Are The Compliances To Be Followed By A Private Limited Company?
The private limited companies are obliged to comply with the provisions and regulatory filings prescribed by t Companies Act 2013. The non-compliance can result in the penalty or even striking off the company, dismissing the directors as well.
The Private Limited Company is considered the most popular form of business and is regulated by the Companies Act 2013. After the economic downfall in the country, many changes are required to comply with the requirements to support the businesses in India, encouraging them to make a recovery.
Recently, the Government struck off more than 2 lakh companies and disqualified more than 3 lakh directors on the ground of non-compliance with various provisions under the Companies Act 2013. It is obvious that a company must be complying with the provisions prescribed by the Companies Act
What are the compulsory compliances for the private limited company?
Here is the compulsory compliance for the private limited company is as follows:
● Company Name Board: The company requires a name and address of its registered office to get the license as a Private Limited Company.
● Letterhead: Every company must have a letterhead on which all the official communication shall be made, which must contain - name, address of the registered office, CIN, telephone and email printed.
● Board meeting: The first board meeting of the directors of the company must be held within 30 days of the incorporation of the company, and the notice of such meeting must be sent to all the directors seven days prior to the meeting. At least four board meetings must be held every year with a maximum gap of 120 days from one meeting to another. However, two meetings are enough for small companies.
An urgent meeting can be held without prior notice if it is supported by at least 95% of the members. The quorum shall be one‐third or two directors, whichever is higher, attending through video conference shall be counted.
● Share Certificate: The company must issue share certificates to the subscribers of the memorandum within 60 days of the Incorporation of the Company.
● Directors: Every director shall disclose in Form MBP-1 about the first meeting he attended the first meeting as a director, the first board meeting he attended in every financial year and if there is any disclosure.
Every company must appoint at least one director who is a resident of India. He must have resided in India for 182 days or more in the previous calendar year.
The persons appointed as director must assent to that through the form DIR-2 and the company must confirm the same through Form DIR-12 within 30 days of the appointment of the director. All the directors must get a DIN number by filing Form DIR-3 to Central Government. A director can resign in writing to the register of the company, and the company must notify the same with ROC within 30 days through Form DIR-12.
A person cannot be a director in more than 20 companies at the same time
● Memorandum of Association (MOA) and Articles of Association (AOA): In case of any change in the MOA or AOA of the company, the same must be notified to the Registrar of Companies with the copies of the altered article or memorandum, notice of meeting and if there is any special resolution, then within 30 days of passing the resolution.
● Registers: Every company must maintain a register of members through MGT-1, if the registrar is is a resident of India, and any register who is not a resident of India, has to file Form MGT-3.
Every Company shall keep at its Registered Office, a Register of Directors and KMP in the prescribed format containing prescribed particulars.
● Auditor: The first auditor requires to be appointed by the board of directors within 30 days of the incorporation. The auditor shall be holding the office till the first annual general meeting, then the board of directors shall appoint another auditor, who will be holding the office till the 6th annual general meeting unless the auditor resigns before that.
These were some of the basic compliances which require to be complied with when starting with a private limited company, but it has other compliances such as event compliances tax compliance, those are regulated by the Company Act 2013.