Companies are one of the best business structures, especially among startups. However, being a limited liability structure and potential for unlimited growth, the set of compliances in the case of companies are higher as compared to the other constitution formats. It’s always useful to keep a compliance calendar handy with yourself in such a case. Or more simply, you can just outsource it to your eAuditor Office
Whatever way you choose, it is important that you have an understanding of the post incorporation compliances applicable to the companies. What are these post-incorporation compliances that you should remember? Let’s understand!
18 Post-Incorporation Compliances After Company Incorporation
Here’s a list of 18 post-incorporation compliances that you should adhere to after company registration in India:
1.Compliances Immediately After Incorporation
- First Board Meeting: After company registration, the company needs to conduct the first board meeting within 30 days after incorporation.
- Declaration of Commencement of Business: The company needs to file the declaration of commencement of business within 180 days from the date of incorporation of the company in case the company has a share capital. This declaration shall be filed in Form 20A.
- First Auditors: The company needs to appoint its first auditors within 30 days from the date of incorporation of the company. This involves obtaining the written consent of the auditor and filing of Form ADT-1 with the Registrar of Companies (ROC).
- Bank Account: Once the company registration is done, it needs to open a bank account. However, it can also be opened along with the incorporation of the company.
2. Annual and Event-Based MCA Compliances
- DIN Verification: Every person who holds a valid Director Identification Number needs to file Form DIR-3 KYC on or before 30th September each year.
- Financial Statements and Annual Return: The company shall file its financial statements along with the director’s report with the registrar in Form AOC-4 within 30 days after the Annual General Meeting of the company. Further, the company also needs to file its annual return in Form MGT-7. The due date for filing MGT-7 is 60 days after the Annual General Meeting of the company is held.
- Number of Board Meetings: The company shall hold at least 4 board meetings each year and the gap between two board meetings should not exceed 120 days.
- Annual General Meetings: The company is required to hold its first Annual General Meeting of the shareholders within 9 months after the end of the financial year. After that, it should hold all the subsequent AGMs within 6 months after the end of the financial year. However, the gap between the two AGMs should not be more than 15 months.
- Secretarial Audit: In case the company satisfies the prescribed criteria, then it should hold a secretarial audit to be conducted by a practising Company Secretary.
- Books and Statutory Registers: The company is responsible for bookkeeping and accounting, preparing and maintaining all the statutory registers as prescribed in the law. These registers should be maintained in the registered office of the company.
- Event Based Compliances: The company should adhere to all the event-based compliances as specified under the Companies Act, 2013. Some of these compliances include intimating the change in the registered office of the company, appointment or removal of directors, change of auditors etc.
3. Other Regulatory Compliances After Company Registration
- Income Tax Filings: The company should ensure income tax return filing and get its accounts audited (if applicable) as per the provisions of the income tax law. Apart from income tax e-filing, it should also file TDS returns. The portal for income tax return filing and TDS return filing is the same.
- GST Filings: If the company has obtained GST registration, then it should ensure the timely filing of its GST returns.
- Employment and Labour Laws: The company should be adhering to all the labour and employment laws applicable to it. Some of these compliances include provident fund, employee state insurance, gratuity etc.
- Regulatory Registrations: The company should ensure to obtain any regulatory registrations applicable to the industry in which the company operates and also adhere to all the compliances. Some of these regulatory registrations can include FSSAI registration, CDSCO etc.
- Intellectual Property Registrations: If the company has any intellectual property that can be infringed, then it is important to obtain necessary intellectual property registrations. This can include copyrights, trademarks as well as patents.
- Foreign Exchange Compliances: In case the company is involved in foreign exchange transactions, then it should ensure compliance with all the laws applicable to foreign exchange transactions. This normally includes the Foreign Exchange Management Act, 1999, Foreign Contribution Regulation Act, 2010 etc. as well as all the applicable rules and regulations issued by the government as well as RBI.
How Can You Ensure Timely Compliance?
From the above, it can be concluded that the company needs to adhere to multiple compliances all round year. However, the benefits of incorporating the company far outweigh the cost. For instance, investors prefer investing in companies more than the partnership firms as they get equity ownership in companies. Further, it is also relatively easier for companies to raise foreign investments as well. Apart from that, companies are one of the most structured formats of business constitution. In future when the operations expand, you can raise capital from the public at large through IPOs. Companies also allow raising debt capital from the public through issue of debt instruments like debentures, bonds etc. That’s why private limited company registrations are growing at a rapid pace.
It is important to ensure timely and accurate compliance under all the applicable laws. Further, as the saying goes, ‘If you think compliance is expensive, try non-compliance’. One of the best recourse in such cases is to appoint professionals who are well-versed with the corporate environment and regulations. They won’t only ensure that you adhere to all the compliances in a timely fashion but also provide you with a roadmap toward growth and prosperity. In case you need any assistance in relation to the post-incorporation compliances, feel free to reach out to your eAuditor Office.
