Compliance requirements for Company
The management of a
company is vested with the Board of Directors. The Board of Directors manages
the day to day affairs of the company subject to the provisions of the
Companies Act and as per the Memorandum and Articles of Association. The
decisions at the meeting of directors are carried by way of resolutions. There
are certain decisions that require the approval of shareholders by way of a
resolution.
The compliance process in a company is ensured by
way of meetings of directors and shareholders, maintenance of Minutes,
Registers and Records, appointment of company secretary, maintenance of
accounts and audit and filing of periodic and event based returns to Registrar
of Companies and other regulatory authorities.
Board of Directors and Meetings
Directors are appointed by shareholders and the
day to day management of company is vested with the Board of Directors. The
Board carry out the management through decisions taken at their meetings. The decisions at the
meeting of directors are carried by way of resolutions. The Board of Directors
has to meet at least once in every three months and at least 4 meetings shall
be held in every year. Minutes of Board Meeting should be recorded and kept
signed by the Chairman of the meetings. Though the day to day affairs are
managed by the board of directors, there is certain decision that requires the
approval of Shareholders meetings.
Shareholders and Meetings
Shareholders are the
ultimate owners of the company and thus they are the ultimate decision making
authority for matters such as appointment of directors etc. Every year, the
company has to convene an Annual General Meeting (AGM) of the shareholders for
adopting the Annual Accounts and appointment of Auditors for the following
year. Any meetings of shareholders other than the Annual General Meeting are
called Extra Ordinary General Meetings (EGM). Minutes of General Meetings of
the company should also be recorded and kept signed by the Chairman of the
meetings.
Company Secretary
Every company having a
paid up capital of Rs.5 Crore or more shall appoint a whole time Company
Secretary and every company having a paid-up share capital of Rs.10.00 Lakhs to
Rs.5.00 Crores shall obtain the Secretarial Compliance Certificate from a Company
Secretary in whole-time practice and have to file the same with the Registrar
of Companies.
Minutes / Registers / Records and
Common Seal
A company is required to maintain and preserve a set of records as
required under Companies Act as follows:
1.
Statutory Registers
such as Register of Members, Register of Directors, Register of Directors
Shareholding, Register of Charges etc.
2.
Share Certificate
3.
Minutes Book
4.
Common Seal
Filing of Returns with office of
Registrar of Companies (ROC)
Compliance mechanism under
Companies Act mandates a company to file documents and Returns to office of
Registrar of Companies (ROC) from time to time. Compliance related filing of
returns / documents with the office of Registrar of Companies can be broadly
classified in two categories;
1.
Annual Statutory Compliances
a. Annual
Accounts.
Every company has to prepare financial accounts consisting of Balance
Sheet and Profit and Loss account on a yearly basis duly audited by a Chartered
Accountant and the same has to be placed before the Annual General Meeting
(AGM) of the company. Copy of the Annual Accounts has to be filed with the
Registrar of Companies within 30 days from AGM.
b. Annual
Return.
Every year a company shall file a return with the Registrar of Companies
within 60 days of AGM containing the particulars such as address of registered
office, register of its members, register of its debenture holders, shares and
debentures, indebtedness, members and debenture holders, past and present, and
directors, managing directors, past and present.
c.
Secretarial Compliance
Certificate.
In case of companies having paid-up share capital of Rs.10 Lakhs to Rs.5
Crore shall file the Secretarial Compliance Certificate with the Registrar of
Companies within 30 days from AGM.
2. Event Based Compliances
The following are few major events that require a filing of a return / document with the Registrar of Companies.
a. Allotment of Shares
b. Increase Authorised Capital
c. Change of Company Name
d. Creation / Modification /
Satisfaction of Charges
e. Change in Registered Office of the
company
f.
Filing of certain
Resolutions Passed by the Board / General Meetings and Agreements entered by
the company
g. Appointment of Directors /
Managing Director and changes among them.
h. Conversion of Private Company to
Public and vice versa
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