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Often smaller companies, lacking the professional skills to deal with these compliances, are bogged down by these processes and find themselves at risk. This article outlines the Minimum Mandatory Compliances as well as the Event Based Compliances applicable to a Private Limited Company.
The directors are required to inform the company about their directorship in other companies every year. Maintenance of statutory register & minutes book: A number of registers are required to be maintained, such as Register of Member, Register of Directors, Register of Contracts, Register of Charges, etc. The registers are required to be kept at the registered office of the company.
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Receipt of share application money Allotment of shares Transfer of shares Appointment/Resignation of directors Appointment of Managing Director/ Whole Time Director Executing agreement with related parties Change in the Bank signatories Change in the statutory auditors There is paperwork that needs to be done for the above and there are various deadlines for these tasks. In case, of noncompliance or even a missed deadline there can be penalties, additional fees or a compounding of offence, etc. Hence, it is necessary that the happening of such events be tracked and compliances met with on time. Cost of Non compliance: The Companies Act, 1956 provides for penalty/fine or imprisonment either of the officer in default and/or the company. The Managing Director, Executive Director are the officer in default. If there is no executive director, all the directors are treated as officer in default. For the procedural lapses such as late filing of forms, additional filing fees are required to be paid. In case of FEMA, the penalty for noncompliance can go up to thrice the amount involved.