Post Incorporation Compliances for Company
Post-Incorporation Compliances for Company
Once a company is incorporated, a set of compliance-related formalities must be completed to maintain compliance as per the Companies Act, 2013. Non-compliance could lead to fines and penalties on the Directors and the Company. Hence, it is important for those incorporating a company to be aware of the post-incorporation compliance requirements of a company. In this article, we look at the post-incorporation compliances required for a company like statutory register maintenance, share certificates, auditor appointment, bank account opening and more.
Post incorporation of a company, the company must purchase the following corporate stationery for use in company compliance matters:
Name Board: Companies are required to paint or affix the name of the company and address of its registered office outside every office or place in which it carries on business.
Company Seal: A round seal bearing name of the company and a seal bearing the name of the company along with the designation of the authorised signatory could be purchased to help with the execution of PAN application and board resolution for the opening of a bank account. The requirement for embossing seal for a company has been removed in the Companies Amendment Act, 2015.
Letterhead: Must print the name and registered office address of the company on all letterhead, invoices, notices and other official documents of the company. It would require the letterhead of the company for the opening of a bank account.
Share Certificates: Company must deliver share certificates to all the subscribers of the company within a period of two months from the date of incorporation. Hence, post-incorporation of the company, the subscribers to the Memorandum of Association of the Company would deposit the money for the shares agreed to be purchased and take share certificates of the company in return.
Statutory Register: All companies require to maintain a statutory register for the company containing information like a register of members, list of directors, charges, debentures and other matters pertaining to the shareholders and management of the company. Must regularly update the Statutory Register and kept at the registered office of the company.
Applying for Company PAN
The Income Tax Department uses the PAN to track all compliance and filings of an Income Tax Assesse using the PAN. PAN is a 10 digit alpha-number character, issued in the form of a laminated card. It requires a PAN for the company to open a bank account, obtain tax registration, file compliances, etc., Hence, the first step post-incorporation of a company is applying for PAN.
PAN for the company can be applied online. On application, it provides a PAN acknowledgement form and sign the acknowledgement form and also get a seal from the Director of the Company. Now, courier the signed document to the NSDL office for processing of the PAN application. PAN acknowledgement copy can be used to open a bank account. Hence, on obtaining the PAN acknowledgement, the process for opening of bank account can be started in parallel.
Opening of Bank for the Company
One of the main activity post incorporations of the company is the opening of the bank account in the name of the company. Since a company is a registered legal entity – recognized by law, the process for an opening a bank account is relatively simple. As per Reserve Bank of India’s KYC norms, it requires the following are the documents to open a current account in the name of the Company:
- Self-attested copies of Certificate of incorporation and Memorandum & Articles of Association;
- Board resolution to open a bank account for Company ;
- Power of Attorney granted to its managers, officers or employees to transact business on its behalf (if applicable);
- Copy of PAN allotment letter;
- Copy of the telephone bill;
Submit the documents with the self-attestation along with a seal of the company for the opening of the bank account. Hence, it is important to obtain a company seal and company letterhead after incorporation of the company.
Appointment of Auditor
After incorporation of a company, it requires the Board of Directors of the Company to appoint the first auditor of the Company, a Chartered Accountant within 30 days of incorporation. In case the Board of Directors fail to appoint an Auditor, then it must intimate the members of the Company, who in turn can appoint an Auditor within 90 days of incorporation of the company. The first Auditors of the Company will hold office until the completion of the first annual general meeting and would be eligible for re-appointment at the end of their term in office.
Commencement of Business Certificate
As per the Companies Amendment Act, 2015, it does not require the Certificate of Commencement of Business. Hence, there is no requirement for obtaining Business Commencement Certificate currently. Know more about Commencement of Business Certificate.