As per Section 2(68) of Companies Act, 2013, “Private Company“ means a company having a minimum paid-up share capital as may be prescribed, and which by its articles:
i)restricts the right to transfer its shares;
ii) except in case of One Person Company, limits the number of its members to two hundred:
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:
Provided further that—
(A) persons who are in the employment of the company; and
(B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and
(iii) prohibits any invitation to the public to subscribe for any securities of the company;
Compliance for a Private Limited Company starts immediately (within the first 30-90 days after incorporation). This leaves very little time for any Company to comply else it has to file additional fees for submitting the required forms.
Some of the compliances are as below:-
1. Registered Office Address:
It’s optional to not mention the registered office address while filing the incorporation SPICE form. Then the Company has to file form INC-22 with the Registrar of Companies (ROC) within 30 days of incorporation. (as per Section 12)
2. First Board Meeting:
Directors shall hold the first Board meeting within the first 30 days as per Section 173 of the Companies Act, 2013. Notice and agenda should ideally include the following:
a) Determination of format of letterhead.
b) Appointment of first Statutory Auditors (Term shall extend up to the first annual general meeting of shareholders). After the appointment of the auditor, Company has to file ADT-1.
c) Disclosure of interest in form MBP-1 and qualification form DIR-8.
d) Selection of a bank for opening current account of the company.
3. Issuance of shares and share certificates:
Within 60 days of incorporation, the Board of Directors shall issue shares to the first subscribers to the Memorandum of Association. The format of the share certificate is as per Form SH-1. The company has to pay adequate stamp duty on the share certificates.
4. Certificate to commence business:
A Private Limited Company has to obtain a certificate to commence its business. The Company has to fulfill two requirements – Subscribers have to deposit the initial money and the registered office address has to be verified. This has to be done within 180 days of the incorporation date.
6. PAN, TAN and registration on the income tax site:
As per present system of SPICE incorporation, the MCA issues PAN and TAN with the incorporation certificate. However the Company has to still create an account on the income tax efiling portal. It also has to register the key persons and the authorized signatory. The authorised person for tax returns shall register his/her Digital signature on the e-filing portal.