Post Incorporation Compliance (The Companies Act)

As per the Companies Act, 2013 a company needs to hold a board meeting within 30 days of its incorporation, appoint an auditor, register office address, open a bank account, allot the securities, issue share certificate and fulfill many other post incorporation compliance.

What are Post Incorporation Compliances?

Once a company gets registered with the Ministry of Corporate Affairs, it has to complete few mandatory formalities for the business to run smoothly. The compliances might differ according to the type of business registered however; here is a post incorporation checklist under Companies Act 2013. Non-Compliance with any of the formalities can lead to heavy penalties for the directors of the company.

First Board Meeting

The company has to conduct its first board meeting within 30 days of its incorporation for discussion on important aspects like approval for opening a bank account of the company, appointment of statutory auditor and authorising other compulsory requirements.

The Company must possess the certificate of incorporation from the Registrar of Companies before its first board meeting.

Appointing an Auditor

As per the provisions of the Companies Act, it is mandatory to appoint the first auditor of the company which will be responsible to hold the office until the first annual general meeting. The person can either be an individual or a firm.

The Board of Directors collectively appoints an auditor for the company who will review and evaluate the company’s financial statements for a term of five years. In case the company is not able to appoint the auditor then the same shall be appointed in an extraordinary general meeting within the next 90 days from the date of incorporation of the company.

Register Office

The Company must have a registered office address within 30 days from the date of incorporation and as and when required so that necessary documents can be exchanged with the company by authorities like Registrar of Companies, Reserve Bank of India etc.

All the government notices, agendas and other legal documents and communications will be addressed to the same address which you will register with the Ministry of Corporate Affairs.

Statutory Registers

Letter Heads and other related documents need to be updated according to the details of the newly incorporated company like –

  • Address of the registered office.
  • Fax number or e-mail id of the company.
  • Phone Numbers
  • Corporate Identity Number (CIN) of the company.
  • Name of the Company.

You can also add your website address to all or some business letters, bill heads, letter papers, notice and other official publications. It is compulsory for all companies to affix, print or paint its name and registered address outside every office place where the business operations are carried.

You can also engrave the characters of your brand/company name on the official seal of your business. The official registers of the company need to be maintained on a regular basis and should be kept at the registered office address.

Some of the registers are open to inspection by the Directors, Members and Creditors which can be provided to them on payment of a specific fee as prescribed by the MCA.

Company PAN Number

Company PAN is a ten-digit alphanumeric character which helps the Income Tax Department to keep a record of all sorts of income tax filing and compliances for the company. It is also required to open a bank account, for tax registrations or file compliances.

The PAN of a company can be applied online and the form must be signed and sealed by the Director of the company. Once filed you will get an acknowledgement copy it will serve as the reference for the processing of your PAN.

New Bank Account

It is necessary for a company to open current account post incorporation so that the genuineness of every transaction can be maintained for the stakeholders of the company. There are some important documents required at the time of opening a company bank account.

  • Power of Attorney granted to the managers, employees, or officers to transact business on its behalf.
  • A Copy of PAN allotment letter or acknowledgement copy of the application.
  • A Copy of the telephone bill
  • A copy of the Board Resolution of the respective company agreeing to open the bank account.
  • Self-attested copies of the Certificate of Incorporation and Memorandum and Articles of Association.
Note: All the documents of the company must be attested with the official seal on it

Securities Allotment and Issue of Shares

The Companies Act has made it mandatory for all the companies to allow its shares to all the subscribers within 60 days from the date of company incorporation. The name of the subscribers must be mentioned in the memorandum of association and articles of association of the company.

Also, the company is supposed to issue share certificates duly signed by its managing director or company secretary. The share certificate must contain the following information –

  • Kind of share – equity or preference shares>
  • Name of the subscriber
  • Number of share certificate
  • Face value of the share
  • Amount Received
  • Number of shares purchased

The stamp duty applied to the issue of share certificates must be paid by the company within 30 days from the date of issuing the shares. The proposed stamp duty can be paid online to the Stock Holding Corporation of India Limited.

GST Registration

Goods and Service Tax (GST) is one tax that will be levied on entire India on the supply of goods and services. Business entities with an annual turnover of Rs. 10 Lakh or more have to get a Goods and Services Tax Registration (in case of special states) however; for all the others, you would require a GST if the annual turnover exceeds Rs. 20 Lakh.

You need to apply for GST Registration within 30 days once you are eligible for it. The process can quickly be completed online by submitting key documents such as:

  • Name of the business
  • Pan card
  • Aadhar card
  • Contact Information (Email ID and Mobile No.) to receive OTP and TRN.

Then based on the Temporary Reference Number (TRN) application has to be completed and the applicant will receive Application Reference number through which they can check the status of their application. Once verification is complete, the applicant receives notification on the registered number and e-mail id.

What happens in case of Non-Compliance?

If any company fails to complete any of the post-incorporation formality then the concerned company and its officers in default are liable to be fined or punished for a time period of the default. If there is a delay in filing any particular form, then an additional fee is to be paid which is calculated for the time of non-compliance. 

Related Articles

Search Companies