POST INCORPORATION COMPLIANCES/ACTIVITIES FOR A

PRIVATE LIMITED COMPANY

On incorporation, a Private Limited Company is a Separate Legal Entity and

has to comply with the provisions of various Laws which it attracts during the
course of its business.

Jotted below are some of the major compliances/activities under various Acts
which the Company is required to take up subsequent to its incorporation.

(I) COMPLIANCES/ACTIVITIES UNDER COMPANIES ACT, 1956:

(1) Stationery & Stamps

The Company should make ready its Common Seal, Letter Heads,
Stamps, Name Board, Sign Board, etc.

The Name Board with the Name of the Company and its Registered
Office address in letters easily legible should be affixed outside the place
of business at a prominent position. It should have its name engraved in
legible characters on its common seal.

Its entire business letters, bill heads, letter paper, notices and other
official publications should have its name and registered office address.

Also print few copies of Memorandum & Articles of Association.

(2) Subscription

The subscription amount as mentioned in the Memorandum of

Association should be brought into the Company within one month
from the date of incorporation.

(3) Common Seal

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 It is an iron seal name of the Company engraved on it. A Company may,
in writing under its common seal, empower any person, either generally or
in respect of any specified maters, as its attorney, to execute deeds on its
behalf in any place either in or outside India. A deed signed by such an
attorney on behalf of the Company and under his seal where sealing is
required, shall bind the Company and have the same effect as if it where
under its common seal. The common seal is required to be used on share
certificates, bonds, debentures and other formal contracts, power of
attorney, etc. to authenticate them. It should also be adopted by the
directors in first Board Meeting.

(4) First Board Meeting

Within Thirty (30) days of incorporation of the Company, Board of

Directors Meeting has to be conducted.

Frequency of Meetings: There should be at least four Board Meetings in

a year having one Board Meeting in every quarter of the year. As per
Secretarial Standard on Meetings of the Board of Directors (SS-1)
maximum interval between two Meetings should not exceed 120 days.

Minimum Attendance: The quorum of a Board Meeting shall be one

third of its total strength of the Board or two directors, whichever is
higher.

The following business may be transacted at the meeting:-

(i) Election of Chairman – One of the Directors may be elected as

Chairman for all the Meetings of the Company or Chairman may be
appointed for each Meeting.

(ii)Certificate of incorporation – The Certificate issued by Registrar

of Companies may be noted.

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(iii) Memorandum & Articles of Association – To take note of the
Memorandum & Articles of Association as registered.

(iv) Constitution of Board of Directors – Directors named in the

Articles of Association shall be the First Directors. There may be
induction of new directors also on requirement.

(v) Taking note of interest of Directors – The notices received from

Directors of their interests in other Companies may be kept before the
Board.

(vi) Appointment of First Auditors - The first auditors should be

appointed by the Board of Directors within one month of the date of
registration of the Company. If not, they shall be elected in the
General Meeting

(vii) Bankers & Bank Account – Authorisation has to be given to open

a Bank Account in the Company’s name for its day to day operations.

(viii) Financial Year of the Company – The first financial year

commences from the date of incorporation till the end of following
March/June/December, etc., as per the decision taken. The second
and subsequent commences from 1st April/1st July/1st January to 31st
March/30th June/31st December.

(ix) Share Certificates – Have to be issued to those persons who have

subscribed the Memorandum of Association. Company may also allot
further shares to existing members or may make new members and
issue share certificates accordingly. Share Certificates should be signed
by at least two directors and one authorized signatory. It should be
stamped properly. Common Seal has to be affixed on it.

(x) Common Seal – The Agreements entered into by the Company,

the share certificates, bonds, debentures and other formal contracts
should possess Common Seal on them for authentication. Board
should adopt such Common Seal.

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 (xi) Registered Office – The Board should take note of the location of
the Registered Office of the Company. This is the place from where it
carries on its operations. Usually the Statutory Books and Registers are
kept at the Registered Office of the Company.

(xii) Preliminary Contracts and Expenses – To approve preliminary

contracts and expenses.

(5) Opening of Bank Accounts

To carry on with the operations of the Company Bank Accounts need to

be opened.

(6) Filings

The Company requires filing certain returns/forms with the Registrar of

Companies under whose jurisdiction it was incorporated. Such filings
are of two kinds –

(a) Periodical – They need to be filed periodically irrespective of

occurrence of any event. Examples:-
Balance sheet and Profti & Loss Account
Annual Return
Compliance Certificate

(b) Event based – They need to be filed on occurrence of certain

event
Examples:-
These are to be filed within 30 days from the date of event.
(i) Form 2 – Return of Allotment when shares are allotted.
(ii) Form 5 – when there is change in Authorised Capital
(iii) Form 8 – when there is Creation/Modification of Charge
on the assets of the Company
(iv) Form 18 – when there is a Change of Registered Office

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 (v) Form 32 – when there is a Change in composition of Board of
Directors either by appointment or resignation

(7) Appointment of Statutory Auditors

The first auditors should be appointed by the Board of Directors within

one month of the date of registration of the Company. If not, they shall
be elected in the General Meeting.

(8) Statutory Books & Registers

A Company should maintain statutory books and registers listed below.

Non-maintenance of these registers attracts penal provisions of the
relevant sections of the Act. Most of these registers are also required to
be made available for inspection to any member / debenture holder and,
in some cases, to other persons as well, during business hours. Subject to
such other restrictions as the company may impose by its articles or in
general meeting, not less then two hours in each working day must be
allowed for inspection.

Such Statutory books and registers should be kept at the Registered

Office of the Company, if not Members’ approval with 3/4 th majority is
required to keep them at any other place within the city in which
Registered Office is located.

S.No. Particulars of Register/Book Section / Rule

1. Register of investments in 49(7)
shares/securities not held in its name
2. Register of fixed deposits 58A
3. Copy of every instruments creating any 136
charge requiring registration
4. Register of charges 143(1)
5. Register of members 150(1)
6. Index of members ( if a company has 151(1)
more than 50 members )

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7. Register of debenture holders 152(1)
8. Index of debenture holders ( if a 152(2)
company has more than 50 debenture
holders )
9. Copies of all annual returns prepared 193
under section 159 / 160
10. Minutes of board of directors and 193
committees thereof
11. Minutes of proceedings of general 193
meetings
12. Books of account and other cost records 209
13. Proper books of account relating to 209
transactions effected at branch office

(9) Annual General Meeting

Apart from the other Meetings of Members of the Company, there

should be one Meeting which shall be held in each year called Annual
General meeting (AGM - shareholder's meeting).

In such a meeting Annual Accounts are adopted by the Members of the

Company, Auditors are re-appointed, vacancy due to rotational
retirement of directors is filled, Dividend is declared and any other
special business as per the notice may be transacted.

The First Annual General Meeting should be held within Eighteen (18)
months from the date of incorporation. The second and subsequent
AGMs shall be held within earliest of the following:-

• Six months from the close of the financial year

• Fifteen months from the date of last AGM
• End of the calendar year

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 (10) Drafting Minutes

The minutes of the proceedings of all the Meetings should be recorded

within Thirty (30) days from the conclusion of the concerned Meeting.
The pages/leaves in the book/register kept for the purpose should be
consecutively numbered.

Each page should be initialed and last page should be signed and dated
by the following –

• In case of Board of Directors Meeting by the Chairman of the

concerned Meeting or the Chairman of the succeeding Meeting.
• In case of General Meeting – by the Chairman of the concerned
Meeting, within Thirty (30) days from the conclusion of the
concerned Meeting or in the event of death or inability of that
Chairman within the said period, by a director duly authorized by
the Board for the purpose.

(II) REGISTRATIONS/APPROVALS UNDER OTHER LAWS:

1. Obtaining Permanent Account Number (PAN) , Tax Deduction

Account Number (TAN), Import Export Code (IEC)

• Why PAN? Permanent Account Number (PAN) is a ten digit

unique alpha numeric code issue by the Income Tax Department. It
is mandatory to quote PAN on return of income and all
correspondence with Income Tax Department. Further, it is
compulsory to quote PAN on all documents pertaining to financial
transactions such as sale and purchase of immovable property, motor
vehicle or payments in cash, of amounts exceeding Rs.25,000/-to
hotels and restaurants or in connection with travel to any foreign
country. It is also mandatory to mention PAN for obtaining a
telephone or cellular telephone connection. Likewise, PAN has to be
mentioned for making a time deposit exceeding Rs.50,000/- with a

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 Bank or Post Office or depositing cash of Rs.50,000/- or more in a
Bank.

• Why TAN? Tax Deduction and Collection Account Number

(TAN) is a 10 digit alpha numeric number required to be obtained by
all persons who are responsible for deducting or collecting tax. It is
compulsory to quote TAN in TDS/TCS return (including any e-
TDS/TCS return), any TDS/TCS payment challan and TDS/TCS
certificates. TDS/TCS returns will not be received if TAN is not
quoted and challans for TDS/TCS payments will not be accepted by
banks. Failure to apply for TAN or not quoting the same in the
specified documents attracts a penalty of Rs. 10,000/-

• Why IEC? No export or import shall be made by any person

without an Importer-Exporter Code (IEC) Number unless
specifically exempted.

2. Registration under Sales Tax/Value Added Tax, Shops & Establishment

Act, Labour Laws (If the number of employees exceed 20).

3. Provident Fund registration (If the number of employees exceed 20) -

The Employees Provident Funds and Miscellaneous Provisions Act,
provides for compulsory contributory fund for the future of an
employee after his retirement or for his dependents in case of his early
death.

4. Profession Tax Registration – Employer is liable to pay Profession Tax

on behalf of its employees earning a salary of Rs.5,000/- or more per
month. Such Employers shall be liable for registration.

5. Registration under Export Promotion Schemes such as SEZ, EOU,

STPI, EHTP.

6. Registration of trade mark, copy rights and other intellectual property

rights

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 7. In case of Foreign Investment, intimation to Reserve Bank of India and
FIPB approvals, if required.

(III) OTHERS:

1. Enter into contracts such as – Employment Contract, Lease, Service

Agreements, Vendor Agreements, etc.
2. Annual and other mandatory Filings –

S.No. What to File When to File

1. Form 20B – Annual Within 60 days from the date of Annual
Return General Meeting (AGM) or if AGM is
not held from the due date of AGM.
2. Form 23AC- Within 30 days from the date of Annual
Balancesheet General Meeting (AGM) or if AGM is
not held from the due date of AGM.
3. Form 23ACA – Profit & Within 30 days from the date of Annual
Loss Account General Meeting (AGM) or if AGM is
not held from the due date of AGM.
4. Form 66 – Secretarial Within 30 days from the date of Annual
Compliance Certificate General Meeting (AGM) or if AGM is
not held from the due date of AGM.
5. Form ITR 6 - Income On or before 31st October of the
Tax Return succeeding year
6. Form 26Q, 24Q – Before 15th of the succeeding month of
Quarterly TDS Returns the previous quarter
7. Half yearly Service Tax On or before 20th October and 30th
Return March
8. Form V – Profession Before 15th of the succeeding month.
Tax

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3. Mandatory Audits –
• Statutory Audit under Section 227 of the Companies Act, 1956
• Secretarial Audit if paid-up capital exceeds Rs.2 Crores
• Internal Audit if paid-up capital and reserves exceeds Rs.50 Lakhs
or turnover exceeds Rs.5 Crores for 3 consecutive years, as per
CARO, 2003.
• Tax Audit under Section 44B of Income Tax Act, 1961 if the
gross turnover exceeds Rs.40 Lakhs.

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