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2020

Compliances Requirements under the Companies Act, 2013

Compliances Requirements under the Companies Act 2013

There are certain Compliances under Companies Act, 2013 that are required to be done once company registration is successfully completed. After registration every company gains a separate legal entity and it becomes liable to comply with all the legal requirements mandated under the Act.

Following is a list of all such required compliances under Companies Act, 2013:

COMPLIANCE INCIDENTAL TO INCORPORATION:

1. Verification of Registered Office
2. Company Information
3. First Board Meeting
4. Appointment of auditor
5. Share Certificate Issuance

ANNUAL COMPLIANCE:

1. Board Meetings
2. Annual General Meeting
3. Receipt of Form MBP-1
4. Receipt of Form DIR-2
5. Preparation of Director’s Report
6. Preparation and Circulation of Financial Statements
7. Appointment of Auditor
8. Filing of E-Form MGT-7
9. Filing of E-Form AOC-4
10. Maintenance of Minutes
11. Maintenance of Statutory Registers
12. Filing of Form DIR – KYC
13. Filing of Statement of Account and Solvency in Form – 8
14. Filing of Annual returns in Form – 11

EVENT BASED COMPLIANCE:

1. Change in Directorship
2. Change in Registered Office Address
3. Increase in Authorized Capital
4. Change in Company Name
5. Registration/Amendment/ Settlement of Charge

Let us discuss each of the compliance requirements into details.

COMPLIANCE INCIDENTAL TO INCORPORATION:

1. Verification of Registered Office:

  • After successful incorporation every company is required to complete verification of its registered office with the registrar of companies.
  • They have an option to communicate the same via SPICe Form at the time of incorporation.
  • However, if that is not done, then it must be communicated through INC-22 within 30 days of incorporation.

2. Company Information:

  • Memorandum of Association and Articles of Association are essential documents for a company. They contain following information:
  • Contents of AOA:
    • Details regarding shares of the company;
    • Details regarding director’s rights, duties and their removal;
    • Details regarding holding and conduct of meeting;
    • Process and rules regarding winding up of the company.
  • Contents of MOA:
    • Name Clause;
    • Situation Clause;
    • Object Clause;
    • Liability Clause;
    • Capital Clause;
    • Subscription Clause;
  • Other Information like:
    • Official phone number;
    • Website, email Id & Fax No.

3. First Board Meeting:

  • Every newly incorporated company is required to conduct its first board meeting within 30 days from the date of its incorporation.

4. Appointment of Auditor:

  • Every company is required to appoint an Auditor within 30 days of incorporation in a board meeting who will either be confirmed or changed in the subsequent AGM.

5. Share Certificate Issuance:

  • Every company is required to issue share certificates to the shareholder named in the incorporation document.
  • All the incorporation details along with share certificate numbers must be mentioned in the records maintained by the company.

ANNUAL COMPLIANCE:

1. Board Meetings:

  • Here we will discuss the yearly board meeting requirement.
  • This is in addition to the first board meeting every registered company is required to conduct that we discussed in the after incorporation compliances.
  • Every registered company is required to conduct minimum 4 board meetings every year.
  • The maximum gap allowed between two consecutive board meetings is 120 days.


2. Annual General Meeting:

  • Apart from 4 board meetings every company is required to conduct its annual general meeting of its members every year.
  • First AGM is required to be conducted within 9 months from the end of financial year and in the subsequent years it is required to be conducted within 6 months from the end of financial year.
  • Maximum gap allowed between two subsequent annual general meeting is 15 months.

3. Receipt of Form MBP-1:

  • Every director is required to submit a disclosure of his/her interest in every other registered entity in Form MBP-1.
  • This disclosure is required to be done every year in the first Board Meeting by every existing director on a mandatory basis.
  • Along with yearly disclosure every director must also disclose any change in his/her interest in the subsequent board meeting after such change happened.

4. Receipt of Form DIR-2:

  • DIR-2 is used for submission of disclosure of non-disqualification by the directors of the company.
  • The company must ensure receipt of this disclosure Form every financial year.

5. Preparation of Director’s Report:

  • As per Section 134 of the Companies Act, 2013 Board of Director of every registered company is required to prepare Director’s report.
  • This Director’s report will be submitted with the Form AOC-4 at the time of annual filing.
  • Director’s report will include information including financials, state of affairs, any kind of changes in company’s composition, declared dividends, loans etc.

6. Preparation and Circulation of Financial Statements:

  • Every company is required to ensure maintenance of its financials and circulate the same along with Director’s report and auditor’s report along with the Notice of their annual general meeting.

7. Appointment of Auditor:

  • Every registered company is required to appoint an Auditor.
  • Auditor can be appointed for a period of 5 years and information of their appointment is required to be submitted with the ROC in Form ADT-1.
  • Earlier this appointment was required to be ratified every year in the AGM during the course of 5 year.
  • However, this requirement has been done away with.


8. Filing of E-Form MGT-7:

  • Section 92 of Companies Act, 2013 specifies that annual return of every company is required to be submitted in e-Form MGT-7.
  • It must be filed within 6 days from the date of its annual general meeting.
  • For every company with paid up capital more than 10 crore rupees along with listed companies the annual return is required to be certified by practicing company secretary.

9. Filing of E-Form AOC-4:

  • Along with annual return you are also required to submit company’s financials are required to be filed with ROC within 30 days from the date of its annual general meeting in e-Form AOC-4
  • Following documents are submitted as attachments with this Form:
    • Copy of Balance sheet
    • Copy of Profit and Loss A/c
    • Notice of AGM
    • Director’s Report
    • Auditors’ Report

10. Maintenance of Minutes:

  • Every company is required to maintain minutes of every meeting held.
  • These minutes must be prepared within 15 days of such meeting and are to be finalized within 30 days.

11. Maintenance of Statutory Registers:

  • As per Section 85 & 88 of companies Act, 2013 every registered company is required to prepare and maintain certain statutory registers at its registered office.
  • These statutory registers include Register of Members, Register of shareholders, Register of Charges, Register of Employee Stock Option, etc.
  • In case any registered company fails to maintain such statutory registers then such company and directors will be prosecuted and fined under the Act.

12. Filing of Form DIR – KYC:

  • It is now mandatory for all directors having DIN to submit their KYC details in e-Form DIR 3 KYC every year.
  • In case of default to file the e-Form on or before the due date, the DIN of the director will be marked as ‘Deactivated due to Non-filing of DIR-3 KYC’ by the ROC.
  • In such cases, the default can be made good by filing the e-Form DIR-3 KYC after paying a late fine of INR 5,000.

13. Filing of Statement of Account and Solvency in Form – 8:

  • Form 8 filed as a part of Annual compliance for LLP contains details of the partners, the contribution made by the partners, and all the details of body corporate as partners and their details.
  • Every LLP registered company should file Form 8 within 60 days of closure of the financial year along with the required fee.
  • The due date for filing Form 8 is 30th May every year.

14. Filing of Annual Returns in Form – 11:

  • Filing Form 11 as a part of Annual compliance for LLP should be filed within due date, in the mid of the year (i.e. 30th October) and should be digitally signed by the partners and certified with the Chartered Accountant.
  • This Form 11 includes two parts one is a statement of solvency, and another is the statement of accounts and income and expenditure.

EVENT BASED COMPLIANCE:

1. Change in Directorship:

  • Whenever there is any change in board of directors including appointment and cessation or change in designation it must be communicated to the registrar through filing of DIR-12 within 30 days of such change.

2. Change in Registered Office Address:

Any company can change its registered office due to various reasons. However, it is obligated to intimate such change to the Registrar Of Company. Following are different scenarios for change in registered office:

  • If such change is within the local limits of the city then only INC-22 is required to be filed for intimation.
  • If such change is outside the boundaries of city but within the state then special resolution is passed. E-Form MGT-14 along with INC-22 is required to be filed.
  • On the other hand if registered office is shifted to another state or outside the jurisdiction of one ROC to another there are some additional compliance. Furthermore, along with MGT-14 and INC-22 company is required to file for Central Government approval in INC-23 and its confirmation is filed in INC-28.

3. Increase in Authorized Capital:

  • In case you are planning to increase the authorized capital of any company first step is to pass a special resolution for changing the MOA in the EGM. File MGT-14 for registering such special resolution. Finally, the next step is to file SH-4 with the ROC.

4. Change in Company Name:

If the members decide to change the name of a registered company then following steps are required to be followed:

  • Check for name availability and reserve it through RUN service.
  • Pass special resolution and file MGT-14.
  • File INC-24 for central government approval.

5. Registration/Amendment/ Settlement of Charge:

These are the compliances under Companies Act, 2013 in case the company creates any charge i.e. a security given for securing any amount of loan.
In case of creation of a fresh charge or any modification of existing charge e-Form CHG-1 is required to be submitted.
On the other hand in case of settlement of charge e-Form CHG-4 is to be filed.

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