Incorporation Compliances of an Indian Company

The incorporation process for businesses has become easier over time, which encourages full compliance by businesses. To avoid any fines or penalties, management must be fully informed of post-incorporation compliance. The Companies Act of 2013 is strict and leaves no room for error. “Ignorance of the law is not an excuse” is what the Latin phrase “Ignorantia juris non excusat” implies. This legal maxim also states that the excuse of ignorance of the law cannot be used to avoid responsibility. The directors and shareholders will have to be aware of the legal compliance involved post-incorporation of the company.

The following are the significant actions that need to be taken post-company incorporation –

1. First meeting: By Section 173(1) of The Companies Act 2013, the company must convene its first board meeting within 30 days of incorporation. Directors are allowed to participate in the meeting live or via video conference.
2. Bank account: Businesses must have a bank account before applying to the government to incorporate their business. Transactions cannot be made in the name of any natural person because the firm is a synthetic entity.
3. Official address: According to Section 12(1), a company must have a registered office within 30 days of its incorporation. All correspondence from the various authorities should be sent to this address. Within 30 days of the date of establishment, the company must tell the registrar of the change.
4. It’s all in the name: Every business must display its name at every location from which it conducts business operations. It must be displayed in the language that is most commonly spoken in the area. The business must also obtain printed negotiable instruments, letterheads with the required information, and a seal with its name etched on it.
5. Auditor: The first auditor must be chosen by the Board of Directors (BOD), except for government business, within 30 days of the company’s registration, as per Section 139(1). If that doesn’t happen, the members must choose the auditor in a special general meeting within 90 days. The initial auditor will serve in that capacity until the first annual general meeting is over.
6. Disclosure of interests: In accordance with section 184(1) of the Companies Act 2013, each director must disclose his or her interests in any business, firm, body corporate, or group of people at the first board meeting. The board must be informed of any modifications to the disclosures at its first meeting conducted each fiscal year. During his first board meeting as a director, any independent directors, if any, must declare that they meet the independence requirements.
7. Statutory registers: At the company’s registered office, the corporation must keep statutory registers. The same must be kept in the specified form; otherwise, the company will face fines.

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8. Share certificate: Within 60 days of the company’s incorporation date, a shareholder must get a share certificate. The time period is taken to be 60 days from the date of allocation in the event that more shares are allocated.

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9. Books of Accounts: In accordance with Section 128, every firm is required to keep accurate books of accounts that fairly and accurately reflect the company’s financial situation. The accounting is done on an accrual basis, and the double entry system must be used.
10. Certificate of Business Initiation: The company must get a certificate of business initiation within 180 days. The directors of the company are required to file a disclosure certifying that each subscriber has paid the full amount owed on their shares.
11. Registration of trademarks: The name or brand name is not completely protected by registering a company or LLP with the name. A company or LLP’s name is only protected to the extent that it cannot have the same or a name that is confusingly similar registered by another company or LLP. Only trademark registration offers a business name the fullest protection.

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12. Registration for Goods and Services Tax (GST): In accordance with the Goods and Services Tax (GST) Act and Rules, every business with a yearly revenue of more than Rs. 40 lakhs (or Rs. 20 lakhs for service providers) must register for GST. Getting GST right away after the Company’s incorporation is not required. When necessary, the Company can acquire this registration. The company may need to obtain the GST Registration as soon as the company is registered in case it is required to provide its GSTIN to any third parties or authorities for its activity.

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How Can Lead India Assist?

As you can see, there are numerous compliance requirements for startups to follow after incorporation. To someone who is new to the business world, the procedure of company post-incorporation compliance can appear complicated. As a result, it is prudent to get the advice of an expert, such as Lead India, before incorporating your firm to ensure that you remain on the right side of the law. Our Accounting and Bookkeeping & Compliance (ABC) package, expertly led by a team of qualified lawyers, chartered accountants, and company secretaries, can assist you in understanding the legal elements of running a business so that you are always compliant. So, what are you holding out for? Join together with us at Lead India Law to build the business of your dreams!!