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Thursday, April 18, 2024

Compliances that is mandatory for Private limited companies

A private limited company is one type of business entity which is owned by family, friends or relatives. The liabilities of the members are limited to the shares in the company. All the private limited companies should submit their annual compliance within 30th September of the following financial year. If the companies failed, the non-compliance may go further up to 12 times penalty charge than the normal ministry of corporate affairs fees. By accessing the bookkeeping software, anyone can easily get all the complete rules and details submission process for the private companies.  Under Companies’ act 2013, the mandatory compliances to be submitted are,

Board of directors meeting

The powerful bodies in a company are absolutely the board of directors. Under Companies Act, section 173 tells about the meeting of the board of directors. If a company is newly coined, the first board of directors meeting should be conducted within 30 days of incorporation. For every year, minimum 4 meetings should be conducted and the gap between two consecutive meetings must not be above 120 days.

Submitting the share certificates

According to section 53 under Companies act 2013, the share certificates provided should be submitted within 2 months from the allotment date. The share certificates should be sent to the members by registered post only after the shareholders give their allotted letters.

Auditor appointments

Under section 139 of the companies act, an auditor for a private limited company should be appointed within 30 days from the company registration date. If he is failed to appoint within 30 days, then a special general meeting should be arranged within 90 days and then the auditor must be selected. In both these cases, the auditor can hold his post till the first annual general meeting.

Minutes of the proceeding of the board meeting and general meetings

According to section 118 of companies act and Rule, 25 of the Companies management and administration rules 2014, the minutes of the meetings should possess a summary of the company proceedings. After the end of the general board meeting, every company should prepare their minutes, keep and sign within 30 days. It is signed by the chairman of the meeting or the chairman of the consecutive meeting. If the chairman is incapable one to sign at that period, the authority board should decide one director to sign the minutes.

Filing the interest disclosure by Directors

Section 184 under the Companies act 2013 mentions the disclosure of interest. It is provided that for the first board meeting, the director has participated and the disclosures are made. If there is any change is disclosures made, and then in the consecutive board meeting held after the change the director can disclose his concern of interest or any association of individuals which includes the shareholding. And also if the director provides the contract with a company and if he is not disclosing his interest, then it is said as the breach of trust among the directors. According to Meetings of the board and its power rules 2014, under rule 9, the disclosure should be made in form MBP-1 and it must be attached with ROC in MGT-14. If the director is not disclosing his interest, then he is liable for imprisonment which may up to 1 year or fine amount of Rs. 50,000 to 100000 or both.

Approval and signing of financial statements

Section 134 of the companies act, rule 8 and 9 of the companies rules states the financial statements and board report. The financial statements should be filed within 30 days of annual general meeting with RoC in AOC-4. It consists of the Balance sheet for financial statements, consolidated financial statements for the company and profit and loss accounts. Based on the above-mentioned details, the board will prepare the final report and submitted in the general meeting. The financial statements are approved and signed by the board of directors and chairperson of the company. The chairperson should be approved by the board of two directors. Out of that two, one will be managing director of the company and CEO, the chief financial officer (any), and company secretary.

Board of Directors reports

Section 134 under Companies act 2013 states that the board of directors reports of every company should be attached to details such as financial accounts, corporate social responsibility standards and balance sheet details of the company. This whole document should be submitted at every annual general meeting.

Annual returns filing

Section 92 of the Companies’ Act states that every company should organize and prepare the annual return with the registrar of companies within 60 days after the annual general meeting. It should be signed by any of the directors of the company and certified by the secretary of the company. If the company fails to compile the recommended files, then the responsible one for the fault is punishable with fine.

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