The term compliance refers to the ability to comply with an order, rule, or requirement. Limited liability companies established in India must ensure that the provisions of the Companies Act 2013 are properly complied with. The Companies Act 2013 regulates the appointment, qualifications, remuneration, and termination of directors of a company, as well as other aspects such as the implementation of a board of directors and a general meeting of shareholders. RoC compliance of registered limited companies is required. Regardless of total sales or amount of capital, the company must meet its annual compliance requirements. All companies registered in India, including limited liability companies, sole proprietorships, limited liability companies, and section 8 companies, must maintain annual compliance, such as annual and income tax returns, each year. Company registration is the most common form of company establishment, but there are various regulations that must be followed after a company is established. Managing day-to-day operations while adhering to difficult corporate laws can be an entrepreneurial job. Therefore, in order to avoid penalties and fines, it is advisable to understand the legal requirements for timely enforcement of these compliances with the help of experts.
What Are The Mandatory Compliances To Be Maintained By The Private Limited Company?
The company’s first board of directors must meet within 30 days of the company’s establishment. Four board meetings are held every three months and must be attended by at least two directors or one-third of the total number of directors, whichever is greater. In addition, meeting discussions must be created and recorded in the minutes of the meeting and kept in the company’s registration office. The announcement must be made 7 days prior to the date and time of the meeting and the intended purpose.
Annual General Meeting
The general meeting of shareholders must be held once a year within six months from the fiscal year-end. A general meeting is held to approve annual accounting, dividend declarations, appointment or reappointment of auditors, committees, director compensation, and more. Meetings are held during business hours, not on public holidays. This is done at the time of registration of the company or the city where the company or registered office is located.
Filing of Form MGT-7
Each company must submit Form MGT7 within 60 days of the date of the Annual General Meeting of Shareholders. It should contain the following information:
- Details of the board and member meeting
- Registration office and the central place of business of other holdings and affiliate companies
- Debenture holders/members including the changes made
- Key managerial personnel, directors, and promoters with mention of the changes made
- Remuneration of directors and key managerial personnel
- Details of legal matters involving the company
- Details of penalties or fines imposed on the company
- Shareholder pattern
- Debentures, shares, and other securities
- Liability or indebtedness
- Certification of compliance matters.
Appointment of Auditor (Form ADT1)
The company must appoint the first auditor within 30 days of its establishment. The first auditor must be appointed for 5 years and the appointment must be submitted to RoC on Form ADT1. If a new auditor is appointed by the company within 15 days of the AGM date, Form ADT1 must be submitted to RoC.
Filing Of Financial Statement (Form AOC-4)
This filing is also a means of communication between shareholders and the company’s board of directors. In addition, this form informs shareholders about their investments and discloses all financial transactions made during the fiscal year. In addition, this formal procedure must be completed within 30 days of the date of the Annual General Meeting of Shareholders. You need to include:
- Balance sheet
- Information about balance sheet information
- Details about corporate social responsibility
- All related party transactions concluded by the Company
- Profit and loss statement
- Audit reports and all other transactions (both director and secretarial audits)
- Auditors and board details should also be filed
Directors are required to disclose details of directors of other companies every year. This can be done through an annual written declaration to the company. In addition, each director of the company must submit to the company a non-disqualification disclosure in the form of DIR8 for each fiscal year. If a new director is appointed, the qualification of the new director will be deemed to be a declaration.
Accounts To Be Audited By A Statutory Auditor
All companies must have statutory auditors for the preparation/auditing of annual and annual financial statements and the auditing of annual financial statements, which auditors must audit. Regulatory audit compliance is performed to examine bank balances, accounting records, and financial transactions to determine if an organization provides accurate financial information.
- Appoint an Audit & Supervisory Board Member of the Company.
- The company auditor finalizes the annual accounting.
Other Event-Based Compliances
In addition to the annual application, there are some other compliances that need to be compiled. The specific instances of such events are:
- Alteration in the authorized capital or the paid-up capital of the company.
- Transfer new share assignments or new shares
- Loan to other companies
- Pass a loan to directors
- If the bank account is open or closed, or the bank account signer has changed.
- You need to send different forms from such events registrar within a particular period. If you miss it additional fees or penalties might be charged Therefore, this suitability must be met in a timely manner.
If the company does not comply with the rules and regulations of the Companies Act, the company and its defaulted members will be punished for the duration of the default. An additional fee will be charged for delays in annual applications. Therefore, it is recommended that you should respond to compliance on time.
Hi, I am Noorshaba Mirza and I am a self taught blogger, I am a Law student and I love writing and learning as “Learning never exhausts the mind.” and I have written many research paper. As writing express and connect to various things so never stop exploring and spreading knowledge.