This article is written by our guest author, Srishti Kumar, Associate, Dehadrai & Co.
The enactment of the Companies Act, 2013 which replaces the Companies Act, 1956 is one of the most significant legal reforms in India, to bring the Indian company law at par with the global standards. The Act has introduced significant changes in the company law in India, especially relating to accountability, disclosures, investor protection and corporate governance.
Under the Companies Act, 2013, there are certain mandatory compliances required to be followed by every company regardless of the type of company, nature of business, etc.
Once a company is registered with the Registrar of Companies (ROC), the following are the key compliances required to be followed by every company –
- Meeting of Board of Directors
The first meeting of Board of Directors is required to be held within 30 days of incorporation of the company.
Further, four Board Meetings are required to be held every financial year such that the gap between two consecutive board meetings is not more than 120 days.
- Disclosure of Interest by Directors
Every Director of the company in the First Board Meeting is required to disclose his interest in other entities in FORM MBP-1.
- Verification of Registered Office
Within 15 days from its incorporation and at all times thereafter, a company is required to have a Registered Office, for receiving and acknowledging all official communications and notices address to it. Verification of the registered office is to be filed in FORM INC- 22 within 30 days of incorporation.
- Display of Company Name and Details
Every company is required to have its name board outside its registered office, along with its name, Company’s Identification Number (CIN), registered office address, phone number and e-mail id, fax number and website address, if any, stated in it.
- Issuance of Share Certificate
The Company is required to issue Share Certificates to the members of the company within 60 days of incorporation of the Company.
- Appointment of Statutory Auditors
In case of newly incorporated Company Auditor may be appointed either by Board of Directors within 30 days of Incorporation of Company or it may be appointed by members in Extra Ordinary General Meeting within 90 days of Incorporation and then ratification or re-appointment is required in every consequent Annual General Meeting of the Company.
- Filing of Financial Statements
Within THIRTY days of Annual General Meeting, every company is required to file its Financial Statements in FORM AOC-4 which shall be digitally signed by at least one director and required to be certified by a company secretary or chartered accountant in practice.
- Filing of Annual Returns
Every company is required to file its Annual Return with Registrar of Companies within SIXTY days of Annual General Meeting in FORM MGT-7 which shall be digitally signed by at least one Director and is required to be certified by A Company Secretary in Practice if the Company is not a Small Company.
- Maintenance of Statutory Register
Following registers are required to be maintained by every company:
MGT-1: Register of Members
MGT-2: Register of Debenture Holders
MGT-3: Foreign register of members, Debenture Holders other security holders or beneficiary residing outside India
FORM SH-2: Register of renewed and duplicate share certificate
FORM SH-3: Register of Sweat Equity Shares
FORM SH-6: Register of Employee Stock Options.
FORM SH-10: Register of Shares or Securities bought back
FORM CH-7: Register of Charges
- Corporate Social Responsibility
Under the Companies Act, 2013, companies are required to make contributions in philanthropic activities. It is important that companies adhere to CSR criteria and undertake CSR activities each Financial Year as mandated under the Act.
In addition to these mandatory compliances, there are specific compliances, for different kinds of companies – one person company, a private company, listed company, unlisted company.
There is a lot to learn about compliances, and compliance has emerged as a major area of work in large corporations.
Apart from compliance, corporate governance is also worth learning given increasing demand for experts.
LawSikho’s Diploma in Companies Act, Corporate Governance and SEBI Regulations, covers in detail, topics like the mandatory compliances of different types of companies insolvency resolution process, CSR activities, special rights of minority shareholders under investment agreements and articles, and more! Learn the practical aspects of company law and rule the boardroom!
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