Corporate Legal Compliances

Once the Company is registered, it makes a lot of economic sense to stay compliant. It helps in efficient and uninterrupted functioning of the Company. As someone rightly said, it takes less time to do things right than to explain why you did it wrong. Besides, there are consequences.

There are some crucial time bound actions and associated reporting, like appointment of Auditors, finalizing of registered office, reporting of receipt of FDI towards share subscription money, issue share certificates, filing of FC-GPR for issue of shares, filing for Commencement of business (INC 20A), reporting in half yearly return MSME Form 1 and IEC (Import Export Code) registrations, wherever required.

Besides FDI compliances and Reserve Bank of India filings, Corporate Legal Compliances mainly include compliances under Companies Act 2013, compliances of Securities and Exchange Board of India Regulations (SEBI) (for listed and to be listed companies) and compliances of labour laws and Code& taxation laws. Besides, there are sector/ industry specific legal compliances related to Financial Services, Infrastructure and manufacturing.

Compliances under Companies Act 2013

Compliances under Companies Act 2013 includes Board meetings, stakeholder meetings, appointment of directors, key managerial personnel, managerial remuneration or related party transaction, creation or modification of charge, maintenance of statutory records such as minutes, registers and related papers etc. Once a company is incorporated, it must undertake certain actions in order to become fully functional:

The company must, within 30 days from incorporation, hold its first board meeting.
The first auditor should be appointed by the Board within 30 days from the date of its incorporation who shall hold the office till the conclusion of it first annual general meeting. If in case, the Board fails to appoint within 30 days, shareholders can appoint the first auditor, within 90 days of incorporation.
The company may appoint additional directors (if required).
In addition to mandatory bank account opened at the time of incorporation, the company may apply for another bank account. Not all the banks are linked with MCA at the moment.
The company must file Declaration of Commencement of Business.
Depending on the type of company, it may apply for Import Export Code (IEC).

Apart from these there are other compliances which can be accessed at Post Incorporation Compliances-Companies Act 2013.

Compliances under Labour Laws

India has enacted four new codes on wages and payment, employment conditions, social security and occupational health, safety and working conditions: the Code on wages, 2019, the Industrial Relations Code, 2020; the Code on Social Security, 2020; the Occupational Safety, Health and Working Conditions Code, 2020. The codes consolidate, subsume and replace 29 national-level labour laws (such as the Industrial Disputes Act, 1947, Minimum Wages Act, 1948). India has state specific labour laws as well. The applicability of such laws is determined by various parameters (such as the nature of work to be performed, type of establishment, number of employees, etc.). However, these Codes are yet to be notified for implementation and till such time these are notified, which may now likely happen from 1st April, 2022, the existing laws would remain applicable.

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (commonly referred to as ‘POSH Act’) is one of the prominent Act under the labour laws. Under the said Act, every Company having 10 more number of employees needs to constitute an Internal Committee (IC) and report the details of sexual harassment compliants received by the committee in an annual report by 31st January every year.

Compliances under Tax Laws

It comprises of the various returns under Income Tax Act, 1961 (Returns for Income, Tax Deduction at Source/ Withholding Tax/ TDS Returns etc.), and Goods and Service Tax, (GST), customs, excise etc.

For compliances under FEMA, please visit: