Over the past years, the process of incorporating a company has been made easier, which boosts full compliance by the companies. The management should be thoroughly aware of post-incorporation compliance to avoid any fines or punishments. The Companies Act 2013 is powerful and valid and leaves no room for any errors. “Ignorantia Juris non-excusat” in legal terms means “ignorance of the law is not an excuse”. This is a legal maxim that goes on to say that one cannot avoid responsibility on the pretext of unawareness of the law. Thus the directors and shareholders should be well aware of the legal compliance involved in post-incorporation of the company.
Let's understand some important actions that need to be taken post company incorporation:
Opening conference
As per Section 173(1), of The Companies Act 2013, the company shall hold a conference of the Board of Directors in or about 30 days from the decision date of incorporation. Directors are allowed to attend the meeting either in person or through video calling.
Bank account
The company needs to have a bank account before even approaching the authorities of incorporation. Since the company is an artificial entity, the bank account cannot be in the name of any person, it has to be in the companies name and the transactions also cannot be done in any person's name.
Some important documents and details required for opening a Current Account with a bank:
Certificate of Incorporation of the Company
photo Copies of Company Incorporation documents such as Memorandum and Articles of Association of the Company.
Permanent Account Number (PAN) of the Company
Board Resolution of Opening and operation of bank Account
KYC details for Directors and Shareholders of the Company
A cheque for an initial deposit of an amount to an Open Bank Account (This deposit can be considered as the initial capital infusion by the shareholder)
Official address
As per Section 12(1), a company shall have a certified office within 15 days of incorporation. All the official communication with the authorities shall be received at this address. The company has to inform the same to the registrar within 30 days of incorporation of the company.
It’s all in the name
Every company is required to have a company name in all the places they carry business operations. It should be displayed in a language that is commonly used in the locality. The company must also get a seal or sticker with the companies name engraved on it, letterheads with relevant information, and printed transactional instruments.
Auditor
According to section 139(1), the first auditor must be appointed by the boards of directors except if the company is owned by the government, within 30 days of registration. Neglecting this, the members must appoint the auditor within 90 days at an unusual common conference.
Interest disclosure
At the first board meeting, every director shall reveal his interest in any company/firm, etc as outlined in section 184(1) of the Companies Act 2013. Any changes in the documents shall be suggested to the board in its first meeting held during each financial year. An independent director, if any, must give a declaration that he meets the standards of autonomy during the first board meeting as a director.
Legal registers
The company shall be required to maintain legal registers at the registered office of the company. Failing to do so the company might face the consequences.
Share certificate
The share certificate must be assigned to a shareholder within 60 days from the date of incorporation. In any case of additional shares being granted, the period is taken as 90 days from the allotment.
Books of Accounts
As per section 128, every company must maintain an account book which will state all the accurate view of the state affairs of the company. The double entry system must be followed, and the accounting must be done daily.
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