Over the past few years, the number of businesses registered as Private Limited Companies has increased greatly. Various factors have led to it becoming one of the most popular processes for registering businesses. According to the latest reports, the number of company registrations has risen by 26 percent.
Compared to the previous years’ reports, which did not include the restrictions imposed by the Covid-19 Pandemic, this data represents a groundbreaking achievement. It was the steps of registration, the benefits, and the compliance policies that contributed to the same.
Compliance Benefits Private Limited Companies
There are several benefits to registering a company under the guidelines of private limited company registration, such as:
- Building trust with investors and customers makes the company credible and allows it to be trusted.
- One can draw investors to themselves as a result of their compliance with the rules and regulations.
- Keeping the status of the company active with regular compliance results can prevent large fines on fee payment.
Regulations for the registration of a private limited company
Registrants need to follow certain rules and regulations in order to get the best results. Compliance policies enable businesses to operate under a uniform mode of operation. In order to be registered under the Companies Act, 2013, private limited companies must comply with the following:
- In addition to being the most influential body in the organization, the Board of Directors should meet regularly. Within 30 days of incorporation, a board meeting must be held, as well as four board meetings per year. There should be a maximum of 120 days between these meetings.
- Section 53 of the Companies Act of 2013 requires that Share Certificates be issued within two months of the date of allotment.
- Auditors must be appointed within 30 days after incorporation by the board of directors. This position can be held by the auditor until the end of the first annual general meeting.
- Section 118 of the Companies Act regulates how minutes of meetings are to be recorded. Minutes should include a summary of the proceedings and a conclusion to them. A duly authorized representative of the company or the chairman of the meeting must sign it.
- Section 184 of the Companies Act of 2013 outlines the requirement that directors disclose their conflicts of interest.
- Financial statements are required to be submitted within 30 days after the annual general meeting, as specified in the Financial Statement Regulation. The Chairperson must sign this and the Board of Directors must approve it.
- At every annual general meeting, the Board of Directors must present a report along with all details of the company. If the individual or company violates the compliance policy, they can be fined.
- According to Section 92 of the Companies Act, 2013, annual returns must be filed with the Registrar of Companies by all companies. Company secretaries must sign and certify the document.
As the number of registered private limited companies has increased considerably in recent years, private limited companies have become increasingly important. As a result, businesses find it convenient, and they must comply with the rules and regulations it imposes. In this way, they will be able to enjoy the benefits of registering as a private limited company.