Must-Have Compliances After Incorporation Of Private Limited CompanyFebruary 9, 2022
A private limited company is the best choice for both small and medium businesses, whether it’s a family-owned or a professionally managed company. A private company has many benefits and is the right choice for many entrepreneurs. It enjoys the status of a separate legal entity and can be started with a minimum capital of ₹10,000. Similarly, a private company receives credibility over time. However, there are certain compliances you need to fulfill after incorporation of a private limited company.
With a private limited company, you can add shareholders and even accept fundraisers from venture capitalists and angel investors. But along with the numerous benefits a private limited company enjoys also come certain compliance requirements. As per the Companies Act of 2013, you need to have legal compliances from day one after incorporation of a private limited company. Moreover, you do get the timeframe of two months to fulfill all the required formalities as per the Companies Act of 2013. Following are the compliances you need to fulfill after incorporation of a private limited company.
Legal Compliances for Newly Incorporated Companies
Appointing an Auditor
As one of the first processes after company registration, a private limited company has to appoint an auditor. As per law, it is important for the board of directors of the private limited company to appoint an auditor within 30 days after registration of the company. However, if the directors fail to appoint an auditor within the stipulated timeline, the members of the company can call for an extraordinary board meeting and appoint the company’s first auditor. The tenure of the auditor in such a case remains until the conclusion of the first annual general meeting of the company.
Disclosing Director’s Interests and Declaration Regarding Disqualification
As a post-incorporation compliance, the directors of the private company need to disclose their interest in other companies or corporates. Similarly, they need to declare that they are not disqualified. The declaration should include directorship and shareholding rights. Moreover, as per the Companies Act, the directors should disclose their interest from time-to-time.
Verification of Registered Office
Apart from having a registered office that is capable of receiving and acknowledging communication and notices, a private limited company must form a registered office within 15 days from the date of incorporation. Moreover, once the office is set up, the company has to verify the address with the Registrar of Companies within a period of 30 days in From INC-22.
All private limited companies have to display their name and address of its registered office outside their premises and on all documents that are communicated. Furthermore, the name and address of the company has to be prominently displayed and they must use an easily recognizable and readable font. Also, the companies must display one board containing their name and registered office address in the local language.
A private limited company should get an engraved seal and get its name and address of the registered office along with the Corporate Identity Number. A private company is required to have a letterhead containing the name, address and contact numbers printed on their billheads, and all its notices.
Once the company has been incorporated, a private limited company must issue share certificates to all of its shareholders within two months.
PAN and TAN
As one of the post-incorporation compliances, a private limited company needs to apply for a Permanent Account Number (PAN) and Tax Account Number (TAN). Similarly, the company would need to apply for GST.