Answered on July 14,2021
One of the first step to become an entrepreneur is to incorporate a private company or a LLP. But how should one decide on whether to go with a Private Company or a LLP? Click here to read my answer to make a right choice.
For now, let us assume you have incorporated a private company. But does the process ends there?
Well No! The process has just begun.
Most of them gets their company easily incorporated through a lot of available online websites. However, there is no clarity on what should be done after that. Hence, it is advised to take a help from a practicing professional who can also guide you with all the after incorporation processes and not just with the incorporation.
In my answer, I have listed down compliances that the company needs to follow immediately after its incorporation.
1. Holding of a Board Meeting
A meeting of board of directors of the company should be held within 30 days of its incorporation. For this, a 7 days’ prior notice shall be given to the board of directors specifying the date, time, venue and agenda matters of the meeting. The agenda of the meeting shall be as specified in Secretarial Standards-I, Click here to find the agenda matters.
2. Opening of Bank Account
A bank account should be opened in the name of the company. With the new incorporation process, the name of the bank with which the company wants to open its account is mentioned in the application stage itself. A person from the concerned bank will contact you through your registered email Id, immediately after the incorporation of the company to complete the account opening formalities.
3. Appointment of First Statutory Auditors of the Company
A company after its incorporation should appoint its first statutory auditor within 30 days of its incorporation in the first meeting of board of directors of the company. Prior to the appointment, a written consent and a certificate of eligibility to such appointment shall be procured from the first statutory auditor.
4. Infusion of the Subscription Amount and Allotment of Shares
The subscriber to the shares of the company will have to infuse the subscription amount in the bank account opened in the name of the company. Once the subscription amount is credited, the company shall allot the shares to the shareholders of the company.
5. Issue and Stamping of Share Certificates
After the allotment of shares, the company shall issue the share certificates in the name of the shareholders within 60 days of incorporation of the company. The share certificates shall be adequately stamped and signed. The stamp duty to be paid on share certificates will depend on the state in which the company is incorporated.
6. Filing of declaration for commencement of business
A company having a share capital must file a declaration for commencement of business within 180 days of its incorporation in e-Form INC-20A. A company is restricted from commencing any business activities unless it has filed such declaration with the Registrar of Companies.
7. Directors’ declaration on qualification
Though this something which the directors are supposed to provide, but the company must ensure to obtain it from the directors. A director before his appointment must declare in writing that he is not disqualified to act as a director of a company. The declaration shall be made in Form DIR-8, as specified under the Companies Act, 2013.
8. Disclosure of Interest of Directors
Again this is something which the directors of the company are supposed to provide, but the company must ensure to procure it from the directors. A director must disclose his concerns or interest in any other entity at the first board meeting in which he participates at the director. The disclosure shall be made in Form MBP-1 as specified under the Companies Act, 2013.
9. Statutory Register of the Company
A register of members, register of debentures holder/ securities holders, register of directors and key managerial personnel, register of charges etc., collectively called as a statutory register of the company should be executed and kept in records of the company. It shall be maintained in the format specified under the Companies Act, 2013. Click here for the format of the statutory register.
10. Display of Company’s Details
A company after its incorporation should have its name and address of its registered office affixed or painted outside its office in legible letters and in a visible location. Further, a company should get its name, address of registered office, corporate identity number along with telephone number, fax number, if any, email-id and website address, if any, printed in all its business letters, bill heads, letter papers and all its notices and other official documents.
Where the company has a website, all the above-mentioned information along with the name of the person who may be contacted in case of any queries or grievances should be displayed on the home page of the website.
A company should ensure to have these top 10 compliances in place immediately after its incorporation in order to avoid any non-compliance and penalties.