Company Law Compliance

A company which has been incorporated in India must ensure compliance with the Companies Act,2013. The Companies Act, 2013 regulates appointment, qualification, remuneration, and retirement of directors of the Company. Aspects such as how to conduct Board Meetings and Shareholders Meetings

Mandatory Compliance

Following is a list of mandatory compliance after a private limited company’s incorporation under the Companies Act, 2013:

1. Meeting of the Board of Directors

A company’s board of directors is one of its most influential bodies
Section 173 of the Companies Act addresses the board of directors meetings
The first board meeting of any corporate organisation must be held within 30 days of its incorporation
Each year, at least four board meetings should be held
The time between two consecutive meetings should not be more than 120 days.

2. Issue of Share Certificates

According to Section 53 of the Companies Act of 2013, share certificates must be handed over within 2 months of the date of allotment
If shareholders surrender their allotted letters, the company should send their share certificates to them via a registered post
This is one of the important mandatory compliance for any private limited company.

3. Appointment of Auditors

According to Section 139 of the Companies Act, the first auditor of a private limited company must be appointed by the board of directors within 30 days of incorporation
If a board does not appoint an auditor within 30 days, they can call an extraordinary general meeting within 90 days
The first auditor may hold the position until the end of the first annual general meeting.

4. Minutes of the Proceeding of the Board Meeting and General Meetings

The element of the minutes of corporate proceedings is governed by Section 118 of the Companies Act and Rule 25 of the Companies Rules 2014
Following the conclusion of every board meeting/general meeting
A private limited company should prepare, sign, and keep minutes within the following 30 days
The minutes should include an accurate summary of the proceedings
The chairman of the meeting or the chairman of the next succeeding meeting should sign the minutes of a board meeting within 30 days
It can also be signed by a director duly authorised by the board if the chairman is unable to sign within the stipulated time

5. Filing of Disclosure of Interest by Directors

Section 184 of the Companies Act of 2013 addresses the disclosure of a director’s conflict of interest. Every director must disclose his or her conflict of interest in any company or group of individuals at the first board meeting in which he/she participates as a director. And then at the first board meeting of each fiscal year or, if the disclosures already made have changed, at the first board meeting held after the change.

It states that every director must disclose his concern or interest in any company or association of individuals at the first meeting of the board in which he participates as a director
And thereafter at the first meeting of the board in each fiscal year or
If there is any change in the disclosures already made, at the first board meeting held after such change
If a director enters into a contract with the company without disclosing his interest, it is considered a breach of trust among the directors
Rule 9 of the Companies Rules, 2014 provides that such disclosure shall be made in form MBP-1 and filed with the ROC in form MGT-14
If the director fails to disclose his interest he shall be liable for imprisonment which may extend to 1 year or with a minimum fine of ₹50,000/- which may extend to ₹1,00,000/- or with both.

6. Approval and Signing of Financial Statements

Section 134 of the Companies Act, 2013 and Rule 8 and 9 of the Companies (Accounts) Rules, 2014 deals with aspects of financial statements and board reports
Every company should file the financial statements within 30 days of its annual general meeting with RoC in AOC-4
Based on the financial statement of the company, the board shall prepare the report and submit it in the general meeting
The financial statement should be approved by the board of directors and should be signed by the chairperson of the company.

7. Report by the Board of Directors

Section 134 of the Companies Act, 2013 provides that the reports of the board of directors of every company should be attached with the details of the company
Like finances accounts and corporate social responsibility standards along with the balance sheet
This should be produced in every Annual General Meeting as it is mandatory compliance
If a company is in default in complying with this provision, the company shall be liable to a penalty of three lakh rupees
Every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.

8. Filing of Annual Returns

According to Section 92 of the Companies Act, 2013 every company should mandatorily prepare its annual return with the Registrar of Companies
It should be prepared within 60 days of the AGM in MGT-7
This should be signed by at least one director and is required to be certified by a company secretary in practice.