30 Days of Post-Incorporation Compliance for a Company in India

Congratulations on incorporating your Private Limited Company in India! While the company registration process is a significant milestone, it’s just the beginning. The next crucial phase is “post-incorporation compliance”, often referred to as “post-registration compliance”. It is an initial period of 30 days after registration.

The first month carries high stakes, and fulfilling these obligations keeps your company legally sound and operationally ready. Following a strict 30-day post-incorporation checklist for Pvt Ltd India is vital to avoid penalties and establish a strong foundation.

Why 30 Days of Compliance is Important?

Ignoring post-incorporation formalities can lead to serious consequences. Here’s why adhering to the 30-day timeline is non-negotiable:

• Avoiding Penalties and MCA Notices: The Ministry of Corporate Affairs (MCA) imposes heavy penalties for non-compliance—for instance, failing to file INC-20A can cost the company ₹50,000 and the officer in default ₹1,000 per day. Timely action ensures the authorities do not mark your company as non-compliant from day one.
• Smooth Bank Operations and Client Trust: Banks require specific documents, including the certificate of commencement of business (Form INC-20A), to activate your company’s bank account. Without an operational bank account, you cannot conduct business, receive payments, or establish client trust.
• Foundation for Annual Compliance: The first 30 days set the stage for all future annual compliance for private limited company requirements. Completing these initial steps correctly makes the subsequent compliance calendar for a private limited company much easier to follow.

Full 30-Day Post-Incorporation Compliance Checklist For a Company

Here is a detailed checklist of essential post-incorporation compliances that companies must complete within the first 30 days:

1. Hold the First Board Meeting (within 30 days)

This is the very first and most important step. According to Section 173(1) of the Companies Act, 2013, every company must hold its first Board of Directors meeting within 30 days of its incorporation.

• Legal Requirement: The meeting must have a quorum, meaning at least two directors or one-third of the total number of directors, whichever is higher, must be present.
• Agenda: The agenda for this meeting is critical and includes:

• Take on record the company’s Memorandum of Association (MOA) and Articles of Association (AOA) (since these are already approved during incorporation).
• Appointment of the first auditor.
• Authorization to open a company bank account.
• Approval of preliminary expenses incurred during incorporation.
• Passing a resolution for the allotment of shares to the subscribers of the MOA.
• Fix the financial year of the company.
• Approve the adoption of the common seal (if applicable).
• Authorize filing of statutory forms with the Registrar of Companies.
• Take note of the registered office address of the company.
• Penalty for Non-Compliance: Every company officer responsible for giving notice of the meeting shall pay a penalty of ₹25,000 if they fail to do so.

2. File Form INC-20A (Commencement of Business)

This form is a declaration that the company has received the value of shares from the subscribers to the MOA and is ready to commence business.

• Legal Requirement: As per Section 10A of the Companies Act, 2013, every company incorporated after November 2, 2018, with a share capital is required to file this form.

Note: Companies that do not have share capital are not required to file INC-20A.

• Filing Timeline: The form must be filed within 180 days of the company’s incorporation. However, it is a prerequisite for a company to commence business or exercise borrowing powers, so it’s best to file it immediately after the first board meeting.
• Consequences of Non-Compliance:

• The company is liable to a penalty of ₹50,000.
• Every defaulting officer is liable to a penalty of ₹1,000 per day for the period of default, up to a maximum of ₹1 Lakh.
• The Registrar of Companies (ROC) can take action to strike off the company’s name from the official register if the form is not filed within the specified time.

3. Appointment of First Auditor

The board of directors must appoint the first auditor of the company.

• Legal Requirement: Section 139(6) of the Companies Act, 2013, requires the Board of Directors to appoint the first auditor within 30 days from the company’s registration date.
• Filing: A notice of the auditor’s appointment must be filed with the ROC in Form ADT-1 within 15 days of the board meeting.
• If the Board Fails to Appoint: If the Board fails to appoint the auditor within 30 days, it must inform the company’s members. The members shall then appoint the auditor in an Extraordinary General Meeting within 90 days.

4. Registered Office Intimation (if applicable)

If the company shifts its registered office from the address used at incorporation, it must file a notice with the ROC within 30 days.

Filing Form INC-22: You must file Form INC-22 to intimate the new registered office address within 30 days of the change. You do not need to file this form if the registered office matches the address mentioned in the incorporation documents.

5. Open Company Bank Account

You must open a current account in the company’s name to manage its finances.

• KYC and Documents: Banks usually ask for these while opening a company bank account:

• Certificate of Incorporation
• MOA & AOA
• Company PAN Card
• Board Resolution authorizing the opening of the account and specifying authorized signatories.

Note: Filing INC-20A requires submitting proof of the company’s bank account, such as a bank statement or a certificate confirming the deposit of subscription money.

6. Maintain Statutory Registers

From day one, a company must maintain various statutory registers at its registered office.

• Legal Requirement: Maintaining these registers is mandatory under Section 88 of the Companies Act, 2013.
• Important Registers:

• Register of Members (Form MGT-1): Contains details of all shareholders.
• Register of Directors and Key Managerial Personnel (KMP): Contains details of directors and their shareholdings.
• Register of Charges (Form CHG-7): Contains details of any loans or assets on which a charge is created.

In addition to statutory registers, companies must maintain minutes books for Board and General Meetings, as well as proper Books of Accounts, right from day one.

Optional but Recommended Early Registrations

Based on your business model, you may need to apply for these registrations early:

• GST Registration: If your annual turnover is likely to exceed the threshold (₹40 lakhs for goods and ₹20 lakhs for services), then it is mandatory to register for GST.
• Depending on the state of your registered office and the type of business activity, you may be required to obtain:

• Professional Tax Registration
• Shop & Establishment License

• Printing & Display: The company’s name, Corporate Identity Number (CIN), registered office address, contact details, and GST number (if applicable) must be printed on letterheads, invoices, and prominently displayed at the registered office.
• PAN & TAN Activation: These are usually allotted along with incorporation. However, the company must ensure its activation for income tax and TDS compliance.

Post-Incorporation Compliance Tips & Best Practices

Here are some useful post-compliance tips and best practices to help your Pvt Ltd company stay on track:

• Use Compliance Trackers: Use a digital compliance tracker for Pvt Ltd to set reminders for all statutory deadlines.
• Consult Professionals: Engaging a Company Secretary (CS) or a Chartered Accountant (CA) is highly recommended to avoid mistakes and ensure timely filings.
• Maintain Digital Records: Keep digital copies of all incorporation documents, board resolutions, and filed forms for easy access and reference.
• Conduct Regular Reviews: Schedule periodic compliance audits to identify gaps early and avoid penalties.

Common Mistakes to Avoid During Post-Incorporation Compliance

Here are some common mistakes that companies should avoid after registration to stay compliant:

• Delaying INC-20A Filing: This is the most common and costly mistake, leading to penalties and operational hurdles.
• Missing the First Board Meeting: Failing to hold the meeting within 30 days is a direct violation of the Companies Act.
• Not Issuing Share Certificates on Time: While the deadline is 60 days, delaying this can complicate things later.
• Ignoring Statutory Registers: Not maintaining mandatory registers under the Companies Act can attract penalties during inspections.
• Overlooking Annual Filings: Missing deadlines for annual returns or financial statements often results in heavy fines and loss of good standing.

Meeting your statutory obligations after incorporating a private limited company goes beyond simple rule-following; it’s a proactive approach to creating a legitimate and prosperous business foundation. By carefully following this important compliance checklist for private companies, you make sure your company follows all the rules right from the beginning.

Looking for expert help with post-registration compliance? Explore our Private Limited Company Compliance Services to get professional assistance and peace of mind.

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Frequently Asked Questions (FAQs)

Q: When should I file Form INC-20A?

You should file Form INC-20A as early as possible, ideally within 30 days, although the statutory deadline is 180 days from incorporation.

Q: How do I appoint the first auditor?

The Board of Directors appoints the first auditor at the first board meeting, which they must hold within 30 days of incorporation.

Q: What happens if I miss the 30-day post-incorporation compliance deadlines?

If you miss deadlines, the MCA imposes penalties, and in some cases, it may even mark your company as non-compliant, restricting its ability to conduct business.

Q: Can I open a bank account before filing INC-20A?

Some banks may allow you to start the process, but the account will not be fully activated for transactions until you provide the proof of filing of Form INC-20A.

Q: Do I need to file annual returns in the first year of incorporation?

Yes, every company must file annual returns and financial statements with the MCA, even in the first year of incorporation.

Q: Is it mandatory to maintain statutory registers?

Yes, statutory registers under the Companies Act, 2013, are compulsory, and failure to maintain them can result in penalties.

Q: Can the compliance tasks be outsourced?

Yes, companies often outsource compliance to professionals such as Company Secretaries (CS) or Chartered Accountants (CA) to ensure accuracy and timely filings.