Post compliances for a Private Limited Company

Advantages for incorporating the Private Limited Company and Post Incorporation/registration compliances for a Private Limited Company Introduction Once a company is formed, a series of compliance-related requirements must be completed in order to remain in conformity with the Companies Act of 2013. Non-compliance may result in fines and penalties imposed on the Directors and the Company. As a result, those incorporating a company must be aware of the company's post-incorporation compliance needs. This article examines the 10 Post compliances for a Private Limited Company must meet, such as statutory register maintenance, share certificates, auditor appointment, bank account establishment, and more. Before learning about "What are the Post compliances for a Private Limited Company after incorporation?" Let's first understand the advantages of incorporating the Private Limited Company. Advantages of incorporating the Private Limited Company Limited Liability This is one of the primary benefits of forming a Private Limited Company. Because a Private Limited Company is a separate entity from its members, its liabilities are distinct from those of the members. The company, not the members, would be liable for any obligations incurred by the company. Members' liability is limited to the number of shares they possess, as opposed to a sole proprietorship or partnership, where the owners must face the entire burden of the debt. As a result, if the company suffers massive losses, the members will not carry the full burden of the obligations. Members'/shareholders' liability is restricted to contributing to the nominal value of shares. Many opportunities When an entity registers as a Private Limited Company, it becomes its own legal entity. This means that it is not in any way tied to its promoter, and the promoter is free to pursue new opportunities as the firm grows. As a result, registering as a private limited company opens up a plethora of opportunities that vastly improve the company's growth chances. Easy Money Raising Any firm that wants to grow quickly needs easy and speedy finance. Because a Private Limited Company is subject to stringent restrictions, its trustworthiness improves, and financial institutions are more willing to lend to them. Furthermore, because private limited firms can sell their shares to the public, it is a simple way for them to raise funds. In the event of a sole proprietorship, funding can only come from debtors, family members, or self-funding. 10 Post Incorporation/registration compliances for a Private Limited Company 1. Bank account Even before seeking the authorities for company incorporation, companies must establish a bank account. Because the corporation is a fictitious entity, no transactions can be conducted in the name of a natural person. 2. Books of accounts According to Section 128, every firm must keep proper books of accounts that provide an accurate and fair picture of the company's financial situation. The double entry system must be used, and accounting must be done on an accrual basis. 3. Company must obtain a seal with its name Every company will be forced to affix its name to all locations where it conducts business. It must be displayed in the language commonly spoken in the area. Furthermore, the company must obtain a seal with its name etched on it, as well as letterheads with pertinent information and printed negotiable documents. 4. First company meeting According to Section 173(1) of The Companies Act 2013, the company must have a meeting of the Board of Directors within 30 days of its incorporation. Directors may attend the meeting either in person or by video conferencing. 5. Appoint the first auditor Except for a government corporation, Section 139(1) requires the first auditor to be appointed by the Board of Directors (BOD) within 30 days of the company's registration. Otherwise, the members must appoint the auditor at an extraordinary general meeting within 90 days. The first auditor's term will last until the end of the first annual general meeting. 6. Company's official address A company must have a registered office within 30 days after its incorporation, according to Section 12(1). This address will be used to receive all official correspondence from various authorities. The company must notify the registrar of the change within 30 days of its incorporation. 7. Statutory registers at the registrar's office The company will be required to keep statutory registers at its registered office. The same must be maintained in the prescribed form, otherwise, the company will face fines. 8. Commencement of a business certificate The company must receive a certificate of a business start-up within 180 days. There is a requirement for the company's directors to file a statement declaring that each subscriber has paid the amount due on the shares. 9. Share the certificate A shareholder's share certificate must be issued within 60 days after the date of formation. In the case of extra shares, the time period is set at 60 days from the date of allotment. 10. Disclosure of interest Section 184(1) of the Companies Act 2013 requires every director to disclose his stake in any company/firm/body corporate/association of individuals at the first board meeting. Any modifications to the disclosures must be disclosed to the board at the board's first meeting of the fiscal year. If there is an independent director, he must declare during his first board meeting as a director that he meets the criteria for independence. Optional Registrations Following a Company's Incorporation in India Import-export registration in order to expand into overseas markets MSME registration is required if the company qualifies under the MSME Act. This will allow the company to take use of numerous government perks, such as loans, subsidies, and welfare programmes. The MSME Samadhan Scheme also allows firms that register a complaint to recover debts owed to customers Trademark Registration India if the company wishes to preserve its brand identity and has a unique name or logo as a product differentiator. Startup India registration allows you to take advantage of different tax breaks from the IRS for a set period. FSSAI Registration is required if the business sells or provides food-related products or services. Bottom Line As you can see, there are a variety of compliance standards that a Private Limited Company must adhere to after establishment. To someone who is new to the business world, the process of incorporating a company can appear complicated. As a result, it is necessary to seek the advice of a professional, before incorporating your company to guarantee that you stay on the right side of the law.

Post compliances for a Private Limited Company

Post registration compliances for a Private Limited Company