Post-Incorporation Compliances Every New Business Should Adhere To

Starting a company is exciting, but once it’s established and functioning, it has to carefully adhere to the law. This is due to the possibility that non-compliance can lead to fines, harm to one’s reputation, and ultimately reduce operational efficiency.

In India, regulations such as the Companies Act, 2013 regulate these compliances, and businesses must go by guidelines released by departments such as the Ministry of Corporate Affairs (MCA), the Income Tax Department, and others.

Below is a detailed analysis of the post-incorporation compliances that are essential for Indian businesses:

1. Certificate of incorporation

  • 1.1 What’s that?
    This certificate, given by the Registrar of Companies (ROC), certifies the existence of your business.
  • 1.2 Why does that matter?
    It is essentially a legal document attesting to your company’s existence, and most other legal procedures, such as opening a bank account or, for example, signing a contract, require it.

2. Registration under TAN and PAN:

  • 2.1 A Permanent Account Number PAN: All companies are assigned PANs by the Income Tax Department, which they utilize for all financial transactions and income tax returns filing.
  • 2.2 Tax Deduction Account Number: To be in compliance with tax rules, you need to have your TAN if your business collects taxes at source (TDS).

3. Establishing a bank account

  • 3.1 Objective: To initiate a current account in the name of the company, you must obtain the Certificate of Incorporation, PAN, and other required documents.
  • 3.2 Compliance: Because of this account’s compliance, which makes accounting and auditing easier, all financial transactions are thereafter completed through it.

4. Registered Office Address

  • 4.1 Requirement: Within 30 days of incorporation, you must notify the ROC of your company’s registered office address.
  • 4.2 Why this matters? All legal notices and communications of significance are directed to this official address.

5. Share Certificate Issuance

Ensure that within two months of incorporation, share certificates are sent to the shareholders. If you keep your allotment records up to date in the statutory register, you will continue to be in compliance with the law.

6. Statutory Registers

Corporations are required by the Companies Act to maintain the statutory registers, which consist of the Register of Directors, the Register of Members, and additional documents. Processes for regulatory audits and inspections depend on these records.

7. Appointment of Auditor

Within thirty days after incorporation, the statutory auditor must be appointed to comply with Section 139 of the Companies Act, 2013. The statutory auditor is expected to verify that the financial statements of the organization comply with accounting rules. Within 15 days following the auditor’s appointment, the corporation must additionally send Form ADT-1 to the RoC.

8. Board Meetings

At least four board meetings must be held in a given year, with the first meeting taking place no later than thirty days after the date of incorporation. Every meeting must have appropriate minutes produced and kept on file in order to comply with the law.

9. Annual General Meeting (AGM)

Within nine months of the company’s financial year’s end, the first AGM must take place. The company’s financial results are given to shareholders at the AGM, after which they can discuss the business, ask questions, and even offer feedback. In general, this will be essential for upholding transparency and involving investors in the growth and long-term direction of the business.

10. Filing Annual Returns and Financial Statements

  • 10.1 Annual Return: Every company must submit its annual return to the ROC no later than sixty days following the Annual General Meeting.
  • 10.2 Financial Statements: Balance sheets and profit and loss statements must be filed in addition to annual returns.
  • 10.3 Penalties: Failure to comply with these filing obligations may result in severe penalties and complicated legal matters.

11. GST Registration

You will have to register for GST if your company’s turnover exceeds the threshold established by the Goods and Services Tax legislation. Additionally, timely filing of your GST returns spares you from paying a penalty.

12. Tax Compliances

  • 12.1 Direct Taxes: Make sure you pay your advance taxes if necessary and file your income tax returns (ITRs) on time.
  • 12.2 Indirect taxes: If you are registered, you must pay and file your GST returns on time.

13. ESI, PF, and Other Labor Law Compliances

If your business employs ten or more people, you must abide by all Provident Fund (PF) and Employee State Insurance (ESI) rules and regulations. For full compliance, your company must be registered with the labor department and maintain the legally required records of the benefits that your employees will receive.

14. Shops and Establishment Act Registration

Businesses must register under the Shops and Establishments Act of their state, ensuring compliance with labor laws concerning working hours, conditions, and benefits.

15. Intellectual Property Protection

To protect your company’s unique slogan, logo or brand name, you need to file a trademark application. By registering your trademark in a timely manner, you protect your intellectual property and prevent others from using it unauthorized.

16. How Plutus Can Simplify Your Company’s Post-Incorporation Compliances?

We take care of statutory auditor appointments, tax filings, labor law compliance, trademark protection, and timely board meetings so you can focus on expanding your company and maintaining compliance.

17. Conclusion

The foundation for the company’s legal standing and overall well-being is its post-incorporation compliances. By enabling a smooth transition into success, these regulations protect a business from facing legal consequences while maintaining oversight and transparency. Maintain track of your compliance status on a regular basis to remain on top of things and make sure your company survives this competitive environment.

To know more about our services, visit our website. https://plutusco.com/

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