There are variegated business domains active in the Indian market and catering to the requirements of their clientele. Regardless of being small scale or large scale company, every business establishment must comply with a set of compliances and standards for legally operating in the market. Moreover, only licensed companies and businesses are allowed to legally provide their products/services in the Indian market.

Ignorance of legal operations and company laws in the market invite forgery. Businesses often land into trouble when business laws and acts are violated or breached. It can also lead to company shut down & imprisonment. Hence, it is recommended to complete all documentation related to business operations and comply with regulations or set of standards as per the industry norms.

Compliances and Their Types

A set of compliance is usually a regulation, guideline or policy mandated by the law. All companies registered under the companies act (2013) or the previous companies act (1956) must comply with all provisions set for operating in the market. Companies that do not abide by the compliance or breach them invite functionality hampering. Defaulters are penalized by imposing hefty fines, imprisonment or both for a specified term.

In order to avoid image tarnishing and legal penalty for breaching compliances, it becomes mandatory for all registered companies to abide by the provisions.

Basically, there are 2 kinds of compliances followed by private firms (companies listed as private limited)

  1. Mandatory Compliances: Regardless of the company stature, all private companies in the market must abide by mandatory compliances.
  2. Event-based Compliances: When a company, during a specific tenure undergoes a change or event needs to comply with event-based compliances. This compliance is mandatory only for the company undergoing the event.

Article presents summary of Both Mandatory Compliances and Event based Compliances for Private Limited Company.

Mandatory Compliances for Private Company

 

S.no.

  

Title

  

Form

  

Compliance
 

 

1.

 Company Name Board –  Every company is expected to paint/affix the name & address of the registered head office. The same must be mounted outside all offices or places where the business is enforced from. It must be ensured that all letters are clearly visible.
2. Letter Head of Company – Letter heads are mandatory for all registered companies. The name of the company must be printed on business letters, bill heads, invoices etc. It must include address of registered office, CIN, and contact details.
3. First Board Meeting – Within initial 30 days of Incorporation of Company, it is essential to hold a meeting of Board of Directors. The notice for the same must be issued to every director at least 7 days prior to the meeting.
4. Subsequent Board Meetings – In a calendar year, a registered company must hold 4 board meetings. The gap between two meetings must not exceed 120 days. Small companies must conduct only 2 Board Meetings.
5. Disclosure of Interest by director MBP-1 In the first board meeting, all directors participating require sharing their concerns or interests in other entities. Also, they require disclosing the information related to shareholding.
6. Issuing of Share Certificate Within 2 months of incorporating a company, the authorities must issue share certificates to all subscribers of memorandum.
7. Resident Director A registered company mandatorily requires appointing one director that has resided in India for at least 182 days in the previous year.
8. Appointment of Director DIR-2

DIR-12

 Every person to be appointed as Director shall provide his consent in Form DIR‐2 and such consent shall be filed by the Company with ROC in Form DIR‐12, within 30 Days of appointment. Individuals appointed as directors must consent in Form DIR-II. The same shall be filed by the company in form DIR-12 within a month of appointment.
9. Qualification of Director DIR 8 Director’s declaration at the time of re-appointment or fresh appointment in Form DIR-8.
10. Resignation by Director DIR 12 Director shall intimate his resignation to the Company, which the Company shall file with ROC in Form DIR‐12 in 30 days. A director is expected to intimate the company at the time of resignation. The company will file the ROC in Form DIR-12 within a month.
11. Annual General Meeting The AGM or annual general meeting must be held before 30th September every year. A prior notice regarding the same must be issued 21 days before the event.
12. Alteration in MOA and AOA The alteration of Articles and Memorandum should be filed with registrar along with copy of altered Articles. It must include details of notice of meeting and SR within 30 days of passing Special Resolution. Every alteration made in MOA and AOA shall be noted in every copy.
13. Annual Return MGT-7 Registered companies must file the annual return within 60 days of conducting the AGM. In case of no AGM conducted, the same must be filed within 60 days the date the meeting was expected to be held.

 
14. Financial Statements E-form AOC-4 & E-form AOC-4 CFS All companies must file the financial statements adopted at the AGM with the registrar within 30 days of the AGM. In case financial statements are adopted in the adjourned AGM, the statement shall be filed within 30 days of the date of adjourned AGM.

 
15. Certification of Annual Return MGT-8 A practicing company secretary will certify only those companies having paid up the annual return share capital of Rs. 10 Crores or more that it

OR

A turnover of Rs. 50 crores or more than it.

 
16. Appointment of Company Secretary ____ It is mandatory for a private company, having paid up share capital of Rs. 5 crores or more, to appoint a full-time Company Secretary.

 
17. Board Report’s ____ Directors’ Report shall be prepared efficiently that must include all the information required under Section 134.

The “Chairperson” authorized by the Board should sign the report, and where he is not so authorized, by at least 2 Directors one of whom shall be a M.D

OR

by the director where there is one director.

 
18. Directors’ Report Directors’ Report, enlisting all the information required for Small Company under Section 134, must be filed within 1 month of AGM along with Form AOC-4.

The “Chairperson” authorized by the Board, will sign the report, where he is not so authorized by at least 2 Directors.
19. Register MGT-1 MGT-2

MGT 3

SH 2

SH 3

SH 6

SH 10

CHG 7

MBP 2

MBP 3

MBP-4

BEN 4

 Maintaining and updating the following registers is mandatory for all companies:

 

register of contracts or arrangements in which directors are interested

 

register of investments not held in its own name by the company

 

register of loans and guarantee

 

register of directors & kmps and their shareholding

 

register of charges

 

register of deposits

 

register of employees stock

 

register of commodities brought back

 

register of equity shares

 

register of renewed and duplicate share certificates
20. Resolution MGT-14 A copy of resolutions along with explanatory statements or agreement for certain matter should be submitted with the ROC in Form MGT-14 within a month.
21. Minutes of Meeting The total time spent for general meeting, creditors, board and committee should be recorded and kept within 30 days of conclusion of every individual meeting.

 

Event Based Compliances for Private Company

 

S.no.

  

Title

  

Form

  

                       Compliance

 
 

 

1.

 Declaration of Commencement of Business INC-20A To be done within 180 days of setting up a company.
2. ACTIVE (Active Company Tagging Identities and Verification) INC-22A All companies registered before 31st December 2017 need to file e-Form ACTIVE (Active Company Tagging Identities and Verification) – INC-22A on or before 25th April 2019.
3. Change in registered office INC-22 Must be updated within fifteen days from the date of such change. It must be done within 15 days of change/shift.
4. Change in Directors or KMP DIR-12 Must be updated within a month
5. Change of name of company INC-24 To be updated within 60 days from the date of applying reservation of name in INC-1
6. Conversion of company INC 27
7. Increase in Authorized Share capital SH-7 To be updated within a month of  gaining ordinance approval
8. Filing of resolution and agreements MGT-14 To be updated within a month of passing the approval.
9. Increase in Paid up share capital (Issue of security) PAS-3  To be done/updated within fifteen days from allocation date.
10. Application for KYC of Directors DIR-3 KYC

 

 

 It should be updated on or prior 30th April of next fiscal year (annual compliance)
11. Change in secured borrowing (Creation, modification and satisfaction of charge) CHG-1 To be updated strictly within a month of creation.
12. Removal of Director before Expiry ADT-2 This has to be updated within 30 days of passing the SR
13. Deposits taken DPT 3 The filing date for it is 30th June. The info must be furnished latest by 31st March in the same year and timely audited by auditors.
14. Significant Beneficial Owner reported BEN 2 The company must file it within 30 days of receipt of BEN 1 to ROC.
15. Condonation of Delay CG 1 The application for condonation of delay, should be filed, with CG in Form CG-1 alongside all stated documents.


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