Corporate digest magazine september 2017

September 2017 INR 150/-

Venture Care

MAGAZINE

Digest

e c n a i l Comp l a i c e Sp Issue Strategy | Finance | Digital | Legal www.venture-care.com

Index

Index Editorial

3

Special Story PROJECT REPORT – AN X-RAY REPORT WITH PRESCRIBED MEDICINE FOR BUSINESS

Legal & Compliance

4 4

GUIDE TO SHUT DOWN A OPC

7

HOW ANNUAL FILINGS WITH ROC HELPS IN CREATING GOOD CORPORATE IMAGE

10

ANNUAL COMPLIANCE FOR OPC

13

ANNUAL COMPLIANCE FOR PRIVATE COMPANY OTHER THAN SMALL COMPANY

17

ANNUAL COMPLIANCE FOR SMALL COMPANY

24

ANNUAL COMPLIANCE FOR Public Limited Company

28

ANNUAL COMPLIANCE FOR LISTED COMPANY.

34

ANNUAL COMPLIANCE FOR LIMITED LIABILITY PARTNERSHIP FIRM (LLP)

40

ANNUAL COMPLIANCE FOR NIDHI COMPANY (LLP)

43

FEMA / RBI Compliances

45

ANNUAL COMPLIANCE OF BRANCH OFFICE

47

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Dear readers, September 2017 issue of the e-magazine focuses on compliances required by the different legal en es.

The issue guides you on shu ng down the OPC (one Person Company) as per new rules made by MCA. A company can be closed by winding up of OPC or Compulsory Winding up (by tribunal)/Voluntary Winding up (By Promoter) and Closure of company as defunct.

Doing business and le ng it grow is good but making and maintaining corporate image is desired and required. The issue discusses the various dimensions including different forms and applicable acts along with penal es for “private limited company other than small company”, “One Person Company”, “Small Company”, “Public Limited company”, “Listed Company”, “LLP” and “Nidhi Company”.

Prashant Kumar

Director

Of course India is a big market and foreign companies would like to do business here and set up an office.

BRANCH office (BO) is setup by a foreign company in India to carry out the BRANCH ac vity for its business.

Sec on 2(42) of the Companies Act, 2013, defines a foreign company as a company or a body corporate incorporated outside India and which has a place of business whether by itself or through an agent, in this country. This defini on includes a Branch Office; all the provisions of the Act applying to the company will also apply to the branch office. For establishment of Branch office of a foreign Company in India, we have to follow provisions of two Act- Companies Act 2013 and RBI Act. A project report is a complete outline for star ng a new business. It discusses right from feasibility to the end of the business cycle. September issue discusses what all things should be included in a sound project report.

Happy Reading...

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September 2017

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Special Story

PROJECT REPORT – AN X-RAY REPORT WITH PRESCRIBED MEDICINE FOR BUSINESS A project report is a complete outline for starting a new business. It discusses right from feasibility to the end of the business cycle. www.Venture-Care.com/Magazine

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Special Story A project report shall be effec ve only if it covers all the dimensions of the business; for example past experience, present status, problems and future prospects of the industry. It must give informa on about the product to be manufactured and the reasons for selec ng the product if the proposed business is a manufacturing unit. It must spell out the demand for the product in the local, na onal and the global market.

It should give informa on on capital, opera ons, methods of func oning and execu on of the business etc. The reader should have NO or Very less scope of raising ques ons to the business promoters.

Let us discuss in detail that the contents included in the project report are how important.

1 General/Organiza onal informa onIt is a kind of brief synopsis of the project report. It gives informa on on the industry in which project/business belongs to. It is important because it gives first look idea to the user that whether the proposed project seems interes ng. It also says that why a par cular project has been chosen.

The organiza onal informa on provides informa on about internal to the organiza on such as legal status, the loca on of the plant, key decision makers, their names, age, addresses, qualifica on, experience, skill set and informa on on execu on team.

2 Purpose of the project reportThe general and very common purpose of preparing a project report is to present the investors or banks' funding.

It should men on clearly the exact purpose if any also.

3 Project descrip onnd

It is a 2 important stage of project report. It is important because it does not only provide informa on about the project but also analyze the project on “strength & weakness” parameters.

Strengths of a project could be: 1.

2.

3.

4.

5.

Strong decision-making team Leadership ability Visionary capability of management Commi ed team for execu on Sound business model and business plan, etc

Feasibility Study includes the following: 1. Product informa on- whether the product chosen for manufacturing is already tested or it is altogether new product.

2. Life of the product- what is the average durability of the product.

3. Demand size- if similar products are already in the market then what is the market demand size of the product.

4. Industry trend- If the chosen product is already tested then es ma ng the future industry trend is easier. But in the case of the new product, the future industry trend can be based on observing the shi in needs, purchasing habits or demographic shi in the popula on.

5. Business Model- It's very key components are Revenue Model and Ini al target market. Revenue model should give a fair idea of “From Where sound and consistent revenue can be generated and How”. Ini al target market says “Who are the customers, How their needs can be fulfilled”. Others are Packaging of product and service, Making assured the customers, Right distribu on channel and other supports, Limited launch, Collec ng feedback, Customer rela on 6. Business Plan- (What for the future)- the Business plan is very essen al from company's future point of view. It should be unbiased, dynamic, well communicated to the managers etc.

7. Important factors affec ng the industry are- Chances of further new entrants, the intensity of compe ons, availability of raw material as and when required, quality of distribu on channel.

8. SWOT analysis (Strength, Weakness, Opportunity, Threat):- Strengths and weaknesses are considered from the company's angle and opportunity and threat are considered from industry's angle. The importance of SWOT analysis can be understood from the below table:

The absence of all these above can be a weakness of the project.

4 Feasibility studyIt is a study of the project from different angles. The inclusion of feasibility study in the project report is very much required.

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Company's

Industry's

Optimum result

Strengths

Opportunity

Aggressive

Strengths

Threats

Combination works as shield

Weaknesses

Opportunity

No optimum result until weaknesses are converted into strengths

Weaknesses

Threat

Very poor situation and company may have to leave the operation

Limita ons of this model

9. Valua on

· Expected future cash flows are prone to change due to various factors such as compe tors' strategy, technological changes, brand dilu on, change in management strategy etc. · How to fix up the discount rate? It is also subject to change over years. Also, there are many factors which affect the discount rate and these factors are unpredictable.

Finally, Valua on is most important part of the project report. It includes: 1.Es ma on of project life 2.Sales Projec ons 3.Es ma on of cost

Opera ng costs mainly include:

Rela ve valua on model:

·Raw material cost ·Payment towards workers, watchman and supervisors and others ·Electricity cost

This model is used to value a business in rela on to similar business. Earnings and/or cash flows of the business undervalua on is compared with those of the similar business and with the help of the given price of the similar business, a price of the business undervalua on is es mated.

1. Variance in sales and cost- it is important for the purpose of sensi vity analysis.

2. Es ma on of Cost of capital of the business 3. Use of valua on methods: it is important because the valua on method chosen shall give op mum valua on result.

The limita on is that: ·Whether the similar business operates in the same products, markets ·Whether the similar business uses the same technology ·Whether the similar business is as old as this business ·Whether price/value of the chosen similar business is unbiased etc.

Generally, there are three popular valua on models: 1. Discounted Cash flow (DCF) model 2. Rela ve valua on model

The last popular model is Earning Capitaliza on model:

3. Earning Capitaliza on model

DCF model.

For raising equity or other finance from any other sources, values use this model. Valuer heavily relies upon the expected future cash flows as communicated by the management. But the values should reduce the future expected cash flows because the management may be biased (it has to raise funds). These cash flows are es mated for a certain me period, say 3-5 years. A er that, these cash flows are discounted at a well-es mated discount rate.

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Under this method, Equity earning is capitalized at a certain rate. This model assumes that the present earning shall remain fixed forever.

Limita ons: ·This model does not consider growth in the business.

The rate at which earning is capitalized is prone to change

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GUIDE TO SHUT DOWN

A OPC

A business may need to be closed for many reasons that may be due to business failure or any other context or circumstance. As per the new rules by...

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September 2017

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A business may need to be closed for many reasons that may be due to business failure or any other context or circumstance. As per the new rules by MCA (Ministry of Corporate Affairs) for the closure of the company.

A company can be closed in the following ways1.Winding up of OPC ·Compulsory Winding up (by tribunal) ·Voluntary Winding up (By Promoter) 2.Closure of company as defunct The above op ons are explained below for a clear understanding of its applicability as per the situa on:-

1.Winding Up of an OPC by Company Law Tribunal An OPC registered in India with MCA (Ministry of Corporate Affairs) can be closed voluntarily but a er two years from the date of incorpora on of the company. No OPC is allowed to \wind up its business before the expira on of the period of two years except in a case when a company crosses the threshold limit.

A one person Company can be wind up before the expira on of two years if the tribunal is in opinion to close the company and pass an order for the same.

Key Reason for closing One Person Company by The Tribunal: 1. If One Person Company crosses the threshold limit which is exceeding paid up share capital of Rs.50 lakhs or average annual turnover of Rs.2 crores.

2. If the company is unable to pay debts.

3. If tribunal passes the order to wind up the company.

4. If a company if not complying with the annual compliances.

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The Following Procedures need to be followed for winning of an OPC by Tribunal: rd

· Passing a resolu on with the support of 2/3 in the value of the creditors of the OPC, for voluntary winding up of the company. · Within 10 days of its approval from the creditors, the no ce of this board resolu on is to be submi ed to the relevant ROC. A declara on sta ng that the OPC has no debts, or if any, they will be cleared through the sales of its assets within one year. · If the OPC has been inac ve for one year a er its incorpora on, then the form FTE is to be filled with ROC within 30 days from the date of signing of closing OPC. · The resolu on for winding up is also to be adver sed in the Official Gaze e and also in a widely circulated newspaper in the district where head office or registered office of the closing OPC is situated. · Appointment of a registered liquidator for processing of the necessary tasks associated with the winding up of the OPC. The liquidator is required to maintain and · Submit all requisite reports and accounts to the tribunal and also to the registrar. · Submission of the statement of accounts, statement of assets and liabili es, Indemnity Bond, etc. · If sa sfied, the Tribunal and the Registrar will pass the winding up and declare the OPC as closed.

Note: If you have any query please comment in the comment box below or Talk with a Company Secretary

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2. Closure of Company as Defunct The company can be shut by announcing it as a defunct company and then striking off the name of the company from the ROC. This can be done by filing the applica on. The procedure is same as the followed while incorpora ng the company. Before announcing the company as defunct, the company must have completed at least one year.

Key Reason for closing One Person Company as a Defunct: 1. If the company itself wants to close.

2. If a company is not in opera on for the period of one year.

3. If a company is not even complying with the law.

The procedure of Closing One Person Company as a Defunct: · A board mee ng needs to be held and a board resolu on with the majority for declaring the company as defunct has to be passed. · A declara on men oning that the company is free of debts or is able to pay the debts if any needs to be done by the majority of directors. · A declara on that the liability, if any, will be met by applicants; duly signed by the directors of the company on an indemnity bond should be filed. · Submit all the required account statements and other documents providing the true and fair view of the company with the Registrar. · The registrar will pass an order to shut the company if he is sa sfied.

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HOW ANNUAL FILINGS WITH ROC HELPS IN CREATING GOOD CORPORATE IMAGE The success of any business pre y much depends on its public image.

When a company starts facing several court cases, the general public will lose their trust in the...

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The success of any business pre y much depends on its public image. When a company starts facing several court cases, the general public will lose their trust in the company and sales in products and services will eventually drop.

Compliance will ensure that a company can uphold a posi ve image and build consumer trust. This also helps build consumer loyalty, since customers are more likely going to return to a service or product from a company they iden fy as trustworthy. This also helps a business with sponsors, adver sers, and government requirements. A business that fulfills annual filing compliance through successful corporate compliance management generally gets signed quickly and easily whenever needed. In this ar cle, am going to list out the important filings a company must comply with ROC.

The E-forms needed to be filed with ROC every year AOC – 4: Purpose 1. Financials of the company including Balance sheet, Profit and loss account, Cash flow statement, its respec ve schedules 2. Auditor's Report – It is the view of Statutory Auditor on financial posi on of the company and its affairs.

3. Accoun ng Policies – These are accoun ng treatment given by the company while preparing accounts and financial statements 4. Notes to accounts – These are other financial disclosures required to be given by Company which are not separately reflected in balance sheet and profit and loss

Companies Registered in India are required to give various disclosures, in ma ons and filing of various

account and it's scheduled 5. Directors Report – It is the Directors Explana on about

documents with various government authori es

company's affairs on various ma ers affec ng

annually. These annual compliance are required to be

shareholders interest along with replies to qualifica ons

done by companies whether it is doing business or not

raised by the Statutory Auditor in its Report

or even if not doing any internal transac on.

Annual filing with the Registrar of Companies Any Company incorporated in India whether it is a subsidiary of the foreign company, joint venture en ty and others, under the Companies Act are required to file the few Forms in electronic form with the concerned Registrar of Companies (RoC).

MGT – 7: Purpose To disclose Registrar of Companies following informa on 1. List of Directors including execu ve and nonexecu ve 2. List of Shareholders 3. Change in Directors during the financial year 4. Change in Shareholders during the financial year 5. Dates of Mee ngs of Board, Commi ees and Shareholders held during the year 6. Total share capital Authorized, Issued, Subscribed, called up and Paid up 7. Total amount of Debentures, Deposits, Loans, secured or unsecured as on financial year end date

ADT – 1 Purpose For In ma on of Appointment of Statutory Auditor to RoC

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Consequences of non-filing of E-Forms: Consequences of non-filing of MGT 7:

Consequences of non-filing of AOC – 4: On Company: not less than Rs.50, 000/- but which may extend to Rs 5,00,000/- On Director and every officer – Imprisonment for a term which may extend to One Year or Fine which shall not be less than Rs.25,000/- but which may extend to Rs.5,00,000/- or with both. Addi onal Fees: It may extend to Twelve mes of normal filing fees

On Company: not less than Rs.50, 000/- but which may extend to Rs5, 00,000/- On every Director and officer – Imprisonment for a term which may extend to 6 months or Fine which shall not be less than Rs.25,000/- but which may extend to Rs.5,00,000/- or with both. On Prac cing Company Secretary – Penalty which shall not be less than Rs.50, 000/- but which may extend to Rs.5, 00,000/– Addi onal Fees: It may extent to Twelve mes of normal filing fees

FOR SUCH HELP FROM THE VERY BEST REGARDING YOUR ANNUAL FILLING WITH ROC NEEDS AND NECESSITIES, CONTACT VENTURE CARE.

Time Limits for filing E forms: Sr.No.

1

2

4

Form

Time Limit

Purpose

ADT – 1

Within 15 days of Appointment of Statutory Auditor (Normally AGM)

Intimation of Appointment of Statutory Auditor

AOC – 4

Within 30 Days of Annual General Meeting

For filing Financials, Auditors Report and Directors Report with RoC

MGT – 7

Within 60 days of Annual General Meeting

For intimating list of directors, shareholders, changes if any

What are the benefits of Annual filing?

Benefits with reference to other than legal Consequences:

TIMELY ANNUAL FILLING HELPS IN CREATING GOOD IMAGE IN PUBLIC

While dra ing Board's Report, Companies include some addi onal informa on in it which may include

Benefits with reference to Legal Consequence: · Avoid legal consequences of addi onal fees, penalty, imprisonment · It serves as a no ce to public, of any informa on required to be given by the company under any act · It may serve as a valid proof or evidence in the court of law

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· Companies add Management Discussion in their board report which serves as a medium of vital informa on to the public. Company through this, communicates various future plans and running projects, future prospects, strengths of the company, steps taken or to be taken by company to overcome its weaknesses and various other informa on which creates good image in mind of public, government and regulatory authori es · Transparency: If a company follow all legal provisions of the Act in an ethical manner, it means it maintains transparency among public and creates an image of ethical company in minds of public, regulatory and government · As these documents are filed with Government authori es and cer fied by professionals, it can create more confidence to the public about the Company and helps to establish a good image in the eyes of stakeholders.

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ANNUAL COMPLIANCE FOR OPC One Person Company (OPC) is new type of business structure in India introduced through Companies Act, 2013.

One Person Company means a company which has only one person as a member. OPC is hybrid between Private Limited Company and Proprietorship.

One Person Company must be converted into a Private Limited Company if it crosses an annual turnover of Rs.2 crores.

In this ar cle we will try to include all the mandatory compliances that are to be made by every OPC immediately a er incorpora on and yearly onward.

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Mandatory Compliances: GENERAL POST INCORPORATION COMPLIANCES 1. Affix A Board Outside Registered Office: Every OPC shall affix a board outside the office sta ng its name and registered office address.

2. Le er Heads: Le er heads of OPC with registered office name & address, CIN, Email-ID, Telephone, website (if any), fax etc., shall be printed.

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3. PAN / TAN : The first requirement a er the incorpora on of OPC is applying for a Permanent Account Number (PAN)/ Tax Deduc on Account Number(TAN). According to amendment made in incorpora on procedure PAN & TAN is integrated with Incorpora on through MCA website at me of Incorpora on. So no need to follow separate procedure for PAN and TAN Applica on.

4. Bank Account: A er obtaining PAN OPC shall open a Current Account with a bank and the promoters shall contribute the subscrip on money to the said account.

5. Inward Remi ances From Non-Residents: In case the subscribers are non-residents, the share subscrip on money shall come by way of Inward remi ance. KYC and Inward remi ance repor ng is to be done within 30 days with the Authorized Dealer Bank. The AD Bank shall issue UIN no. Now, all these filings have to be done online. The link for the website has been provided below:

9. 1ST Board Mee ng: In order to sa sfy the requirement of appoin ng the 1st Auditor of OPC within 1 month from the registra on of OPC (as per the requirement of Sec on 139(6) of the Companies Act, 2013), the Company shall convene its 1st Board Mee ng within 30 days from the date of incorpora on to consider the following ma ers: a. Taking on record the Cer ficate of Incorpora on/ maintain the copies of Incorpora on documents, b. No ng of Registered Office address of OPC, c. No ng of 1st directors, d. Approval of preliminary expenses, e. Approval for opening of a Current Account, f. Appointment of 1st Statutory Auditors, g. Approval of Common Seal. h. Authoriza on for Statutory registra ons.

Ebiz Indias G2B portal- advance foreign remi ance 6. Issue Of Share Cer ficates: OPC shall issue Share Cer ficates to the subscribers of Memorandum within 60 days from the date of company incorpora on. Please ensure that Share subscrip on money is received before issuing Share cer ficates through proper banking channel.

7. FC-GPR (in case of Non-residents): Form FC-GPR is to be filed within 30 days of allotment (issue of share cer ficates in this case) with the AD bank.

This filing is done online now. The link for the website has been provided below:

Ebiz Indias G2B portal- FC-GPR 8. Stamp Duty: Stamp Duty is to be paid within 30 days of Issue of Share Cer ficates. Stamp Duty varies from State to State and is therefore determined by the place (state) in which the registered office of OPC is situated.

10. Appointment of first Auditor of OPC within 30 days of Incorpora on: Sec on 139 (6) of the Companies Act, 2013 requires OPC to appoint its Auditor within 30 days from its Incorpora on.

Auditor will be appointed for 1 year ll the conclusion of first AGM. 11. 1ST Annual General Mee ng: A newly incorporated Company is required to hold its first Annual General Mee ng within the period of 9 months from closing of its first financial year.In case of one Person Company, there is only one member, so holding of Annual general mee ng is not required and only ordinary resolu on is to be passed in annual general mee ng.

12. Service Tax/ VAT/ IEC Registra ons: All the statutory registra ons like Service Tax, VAT, IEC (Import Export Code) etc. may be applied for, depending on the type of the Company.

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13. Provident Fund: A company employing more than 20 employees is liable to deduct PF contribu on @ 12% of basic salary & ESIC @ 4.75% of salary(As per the latest no fica on, ESIC has raised the threshold wage limit from 15,000 to 21,000).

14. Maintain Statutory Registers, Minute Books: Company shall maintain all the statutory books, registers and minute books as stated in the Companies Act, 2013.

Non-maintenance shall a ract penal provisions.

15. Register Of Members: The name of the subscribers to be entered in the Register of Member with date of incorpora on of OPC as the date when subscribers are deemed to have become members of OPC.

ANNUAL COMPLIANCES 1. Mee ng of Board of Directors:.

4. Filling of Disclosure of interest by Directors& Disclosure regarding Non Disqualifica on: It is mandatory for OPC to hold at-least two Board Mee ngs in a year and there should be minimum gap of 90 Director of every OPC are required to give disclosures days between two board mee ng (where there are more about their interest in any other business en ty in first than two board mee ngs then me gap of 90 days is not Board Mee ng in which they par cipate as a Director and required). therea er in First Board Mee ng of every financial year in FORM MBP-1 to OPC. 2. Annual General Mee ng: In case of one Person Company, there is only one member, Every Director of OPC in each Financial Year will file so holding of Annual general mee ng is not required and DIR -8(disclosure of non-disqualifica on) with OPC. only ordinary resolu on is to be passed in annual general 5. Filling of Financial Statements or Financial Results: mee ng.

Every OPC is required to file its Financial Statements 3. Minutes of proceedings of Mee ng of Board of Directors, within 30 days of its Annual General Mee ng with Registrar General Mee ng: of Company in E-FORMAOC-4 It is mandatory for every OPC to cause minutes of the 6. Filling of Annual Return: proceedings of every mee ng of Board of Directors, It is mandatory for every company to file its Annual Return General mee ng within 30 days of conclusion of mee ng with Registrar of Companies within 60 days of Annual concerned. Minutes should be entered in the Minutes Book General Mee ng in E-FORM MGT-7. within thirty days from the date of conclusion of the Mee ng.

7. Appointment of Auditor Minutes of the Mee ng of the Board or Commi ee should An Auditor will be appointed for term of One year in AGM be signed and dated by the Chairman of the Mee ng or the for next financial year and the company needs to file form Chairman of next Mee ng.

ADT -1 within 15 days from AGM date.

Minutes of a General Mee ng should be signed and dated by the Chairman of the mee ng or in the event of death or 8. Maintenance of Statuary Registers: inability of the Chairman, by any director duly authorized Following registers are required to be maintained by every by the Board for the purpose, within thirty days of the OPC: General Mee ng.

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a. MGT-1: Register of Members b. MGT-2: Register of Debenture Holders c. MGT-3: Foreign register of members, Debenture Holders other security holders or beneficiary residing outside india d. FORM SH-2: Register of renewed and duplicate share cer ficate e. FORM SH-3: Register of Sweat Equity Shares f. FORM SH-6: Register of Employee Stock Op ons. g. FORM SH-10: Register of Shares or Securi es bought back h. FORM CH-7: Register of Charges

Non-Compliance If OPC fails to comply with the rules and regula ons of the Companies Act, then OPC and every officer who is in default shall be punishable with fine for the period for which default con nues.

If there is delay in any filing, then addi onal fees is required to be paid, which keeps on increasing as the me period of non-compliance increases.

The Addi onal Filing fees depends upon two factors namely Normal filing fees and the me period delay in filing forms.

Period of Delay

Additional Fees

Upto 30 days

2 times of normal fees

> 30 days upto 60 days

4 times of normal fees

> 60 days upto 90 days

6 times of normal fees

> 90 days upto 180 days

10 times of normal fees

More than 180 days

12 times of normal fees

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ANNUAL COMPLIANCE FOR PRIVATE COMPANY OTHER THAN SMALL COMPANY Companies incorporated in India are primarily regulated by the recently enacted Companies Act, 2013. The Companies Act, 2013, provides much legal compliance that are to be made by every company like repor ng of ďŹ nancial results, repor ng of changes in management, maintenance of statuary registers, audi ng of accounts etc.

In this ar cle we will try to include all the mandatory compliances that are to be made by every Private Limited Company immediately a er incorpora on and yearly onward.

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Mandatory Compliances: GENERAL POST INCORPORATION COMPLIANCES 1. Affix A Board Outside Registered Office: Every Company shall affix a board outside the office sta ng its name and registered office address 2. Le er Heads: Le er heads of the company with registered office name & address, CIN, Email-ID, Telephone, website (if any), fax etc., shall be printed.

3. PAN / TAN: The first requirement a er the incorpora on of a company is applying for a Permanent Account Number (PAN)/ Tax Deduc on Account Number(TAN). According to amendment made in incorpora on procedure PAN & TAN is integrated with Incorpora on through MCA website at me of Incorpora on. So no need to follow separate procedure for PAN and TAN Applica on.

4. Bank Account: A er obtaining PAN, the company shall open a Current Account with a bank and the promoters shall contribute the subscrip on money to the said account.

5. Inward Remi ances From Non-Residents: In case the subscribers are non-residents, the share subscrip on money shall come by way of Inward remi ance. KYC and Inward remi ance repor ng is to be done within 30 days with the Authorized Dealer Bank. The AD Bank shall issue UIN no. Now, all these filings have to be done online. The link for the website has been provided below:

6. Issue Of Share Cer ficates: Company shall issue Share Cer ficates to the subscribers of Memorandum within 60 days from the date of company incorpora on. Please ensure that Share subscrip on money is received before issuing Share cer ficates through proper banking channel.

7. FC-GPR (in case of Non-residents): Form FC-GPR is to be filed within 30 days of allotment (issue of share cer ficates in this case) with the AD bank.

This filing is done online now. The link for the website has been provided below:

Ebiz indias G2B portal- Fc-GPR 8. Stamp Duty: Stamp Duty is to be paid within 30 days of Issue of Share Cer ficates. Stamp Duty varies from State to State and is therefore determined by the place (state) in which the registered office of the Company is situated.

9. 1ST Board Mee ng: In order to sa sfy the requirement of appoin ng the 1st Auditor of the company within 1 month from the registra on of the company (as per the requirement of Sec on 139(6) of the Companies Act, 2013), the Company shall convene its 1st Board Mee ng within 30 days from the date of incorpora on to consider the following ma ers:

Ebiz indias G2B portal- Advance foreign Remi ance

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a. Taking on record the Cer ficate of Incorpora on/ maintain the copies of Incorpora on documents, b. No ng of Registered Office address of the Company, c. No ng of 1st directors, d. Approval of preliminary expenses, e. Approval for opening of a Current Account, f. Appointment of 1st Statutory Auditors, g. Approval of Common Seal (if any), (use of Common Seal has been made op onal since 2015). h. Authoriza on for Statutory registra ons.

10. Appointment of first Auditor of the company within 30 days of Incorpora on: Sec on 139 (6) of the Companies Act, 2013 requires a Private Limited company to appoint its Auditor within 30 days from its Incorpora on.

If Board of directors failed to do so then they shall inform the same to members and members are required to appoint company Auditor within 90 days at an EGM. The Auditor will has to hold office to comple on of first AGM. The Company need not to file Form ADT-1as these provision are applicable to auditors appointed under Sec on 139 (1) of the Companies Act, 2013.This mean filing of form ADT-1 is not required for First Auditor under Companies Act, 2013.

Auditor will be appointed for 1 year ll the conclusion of first AGM except following. a) All Private Limited Companies with Paid-up Share Capital >= Rs. 20 crores, or, b) All Companies with Paid-up Share Capital less than the threshold limit men oned above, but having public borrowings from financial ins tu ons, banks or public deposits >= Rs. 50 crores Will appoint auditor for the 5 (Five) year and form ADT-1 will be filed for 5-year appointment. A er that every year in AGM shareholder will ra fy the Auditor but there is no need to file ADT-1 An individual as auditor for more than 1 term of 5 consecu ve years; and An audit firm as auditor for more than 2 terms of 5 consecu ve years.

www.Venture-Care.com/Magazine

11. 1ST Annual General Mee ng: A newly incorporated Company is required to hold its first Annual General Mee ng within the period of 9 months from closing of its first financial year 12. Service Tax/ VAT/ IEC Registra ons: All the statutory registra ons like Service Tax, VAT, IEC (Import Export Code) etc. may be applied for, depending on the type of the Company.

13. Provident Fund: A company employing more than 20 employees is liable to deduct PF contribu on @ 12% of basic salary & ESIC @ 4.75% of salary(As per the latest no fica on, ESIC has raised the threshold wage limit from 15,000 to 21,000) 14. Maintain Statutory Registers, Minute Books: Company shall maintain all the statutory books, registers and minute books as stated in the Companies Act, 2013. Non-maintenance shall a ract penal provisions.

15. Register Of Members: The name of the subscribers to be entered in the Register of Member with date of incorpora on of the company as the date when subscribers are deemed to have become members of the company.

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ANNUAL COMPLIANCES 1. Mee ng of Board of Directors: The Company is required to hold 4 mee ngs in every financial year in such a manner that the gap between 2 Board Mee ngs should not be more than 120 days. There should be 1 Board Mee ng in one Quarter.

Two directors should be present at the board mee ng, or if there are more than two directors, 1/3rd of the total directors should a end the board mee ngs.

2. Annual General Mee ng: It is mandatory for every Private Limited Company to hold an AGM in every Calendar Year. Companies are required to hold their AGM within a period of six months, from the date of closing of the Financial Year. Time gap between two AGM should not exceed 15 Months.

The AGM should not be held on public holidays. It should be held during business hours and at the registered office of the company, whether it is a city or village.

3. Minutes of proceedings of Mee ng of Board of Directors, General Mee ng: It is mandatory for every company to cause minutes of the proceedings of every mee ng of Board of Directors, General mee ng within 30 days of conclusion of mee ng concerned.

Minutes should be entered in the Minutes Book within thirty days from the date of conclusion of the Mee ng.

Minutes of the Mee ng of the Board or Commi ee should be signed and dated by the Chairman of the Mee ng or the Chairman of next Mee ng.

Minutes of a General Mee ng should be signed and dated by the Chairman of the mee ng or in the event of death or inability of the Chairman, by any director duly authorized by the Board for the purpose, within thirty days of the General Mee ng.

4. Filling of Disclosure of interest by Directors& Disclosure regarding Non Disqualifica on: Director of every company are required to give disclosures about their interest in any other business en ty in first Board Mee ng in which they par cipate as a Director and therea er in First Board Mee ng of every financial year in FORM MBP-1 to the Company.

Every Director of the Company in each Financial Year will file DIR -8(disclosure of non-disqualifica on) with the Company.

5. Filling of Financial Statements or Financial Results: Every Company is required to file its Financial Statements within 30 days of its Annual General Mee ng with Registrar of Company in E-FORMAOC-4 6. Filling of Annual Return: It is mandatory for every company to file its Annual Return with Registrar of Companies within 60 days of Annual General Mee ng in E-FORM MGT-7.

Annual Return of Private Limited Company whose

Paid up share Capital Exceeding 50 lac; or Turnover exceeding 2 Crore has to be sign by Company Secretary in Prac ce by affixing DSC on E Form MGT -7.

7. Annual Return Cer fica on: Annual Return of the Company who's paid up share capital is Rs. 10 Crore or more or turnover of Rs. 50 crore or more shall be cer fied by a Company Secretary in Prac ce in form of MGT -8.

8. Appointment of Auditor An Auditor will be appointed for term of One year in AGM for next financial year and the company needs to file form ADT -1 within 15 days from AGM date.

Auditor will be appointed for the 5 (Five) year and form ADT-1 will be filed for 5-year appointment. A er that every year in AGM shareholder will ra fy the Auditor but there is no need to file ADT-1

www.Venture-Care.com/Magazine

September 2017

20

An individual as auditor for more than 1 term of 5 9. Maintenance of Statuary Registers: consecu ve years; and Following registers are required to be maintained by An audit firm as auditor for more than 2 terms of 5 every company: consecu ve years.

MGT-1: Register of Members The Companies to which the above provision is applicable MGT-2: Register of Debenture Holders are: MGT-3: Foreign register of members, Debenture Holders a) All Private Limited Companies with Paid-up Share other security holders or beneficiary residing Capital >= Rs. 20 crores, or, outside india b) All Companies with Paid-up Share Capital less than the FORM SH-2: Register of renewed and duplicate share threshold limit men oned above, but having public cer ficate borrowings from financial ins tu ons, banks or public FORM SH-3: Register of Sweat Equity Shares deposits >= Rs. 50 crores FORM SH-6: Register of Employee Stock Op ons.

FORM SH-10: Register of Shares or Securi es bought back FORM CH-7: Register of Charges

Non-Compliance If a Company fails to comply with the rules and regula ons of the Companies Act, then the Company and every officer who is in default shall be punishable with fine for the period for which default con nues.

If there is delay in any filing, then addi onal fees is required to be paid, which keeps on increasing as the me period of non-compliance increases.

The Addi onal Filing fees depends upon two factors namely Normal filing fees and the me period delay in filing forms.

Period of Delay

Additional Fees

Upto 30 days

2 times of normal fees

> 30 days upto 60 days

4 times of normal fees

> 60 days upto 90 days

6 times of normal fees

> 90 days upto 180 days

10 times of normal fees

More than 180 days

12 times of normal fees

www.Venture-Care.com/Magazine

September 2017

21

EVENT BASE COMPLIANCES: 1. Establishment of Vigil Mechanism: Following Private Limited Companies shall establish a vigil mechanism for their directors and employees to report their genuine concerns or grievances(I) Companies which accept deposits from the public (II) Companies which have borrowed money from Banks and PFI in excess of Rs.50 Crores.

Companies which are not required to cons tute Audit Commi ee shall nominate a director to play the role of audit commi ee for the purpose of vigil mechanism to whom other directors and employees may report their concerns.

The details of establishment of Vigil mechanism shall be disclosed by the company in the website, if any, and in the Board's Report.

2. Appointment of Internal Auditor: As per sec on 138 of Companies Act 2013 certain class of companies is required to appoint Internal Auditors.

The following class of Private Limited companies shall be required to appoint an internal auditor or a firm of internal auditors, namely:(I) turnover(income) of 200Cr rupees or more during the preceding financial year; or (II) outstanding loans or borrowings from banks or public financial ins tu ons exceeding 100Cr rupees or more at any point of me during the preceding financial year; or

3. Corporate Social Responsibility: Corporate Social Responsibility (CSR), a term widely use for defining the responsibili es of Corporate world towards the society & environment. In order to encourage more en es to par cipate in CSR, the Government of India has actually implemented the concept of CSR in the new Companies Act 2013.

Sec on 135 of Companies Act 2013, provides that every specified company shall spend at least 2% of average net profit made during immediate three preceding financial years on CSR on projects and programs specified in Schedule VII of companies act 2013 Eligibility Criteria: Every Company (whether public/private/foreign company) having either of following.

I. Net Worth of 500 crore or more, ii. Turnover of 1000 crore or more, iii. Net profit of 5 crore or more, During any financial year shall be required to follow the CSR provisions.

Applicability of XBRL Following class of companies shall file their Balance sheet in XBRL format.

(I) All companies listed in India and their subsidiaries, including overseas subsidiaries; (ii) All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 crore or above.

Provided that company in Banking, Insurance, Power and NBFC need not to file financial Statement in XBRL format

www.Venture-Care.com/Magazine

September 2017

22

More Ideas for Your Business WHAT WE DO Since 2010, We are helping businesses and enterprises to Plan, start & Grow Business and Close or Exit from a Business.

We at Venture Care generate ideas, spark actions and quantify time-bound results by providing tailored, practical and affordable solutions.

Venture-Care is dedicated to turning good ideas into measurable change and to guide you to flourish your business aspirations.

Our Solutions Strategy | Finance | Digital | Legal

Contact Us Head Office (India)

Branch office (Netherlands)

Venture Care Ajinkytara, Kalaniketan, Sur. No. 29, Kalanagar Near Rajshri Shahu Bank.

Dhankawadi. Pune 43

Venture Care JonkerFransstraat 46, 3031 AV Rotterdam, (NL) Phone: +31 614 575 275

www.venture-care.com

020 65363633

Note: Venture Care is a Brand of S&F Advisory Private Limited.

It’s not how many ideas you have.

It’s how many you make happen.

It’s your idea or venturecare’s, We make it happen to Plan, Launch and Grow your business. See how at www.venture-care.com

ask@venture-care.com

ANNUAL COMPLIANCE FOR SMALL COMPANY The concept of “Small Company” has been introduced for the first me by the Companies Act, 2013.

The Act iden fies some companies as small companies based on their capital and turnover for the purpose of providing certain relief/exemp ons to these companies. Most of the exemp ons provided to a Small Company are same as that provided to a One Person Company.

www.Venture-Care.com/Magazine

September 2017

24

SMALL COMPANY: Sec on 2(85) defines a Small Company as – ''Small Company'' means a company, other than a public company whose Paid-Up Share capital < 50 Lacs AND Turnover < 2crore Provided that nothing in this Sec on shall apply to— 1. a holding company or a subsidiary company 2. a company registered under Sec on 8; or 3. a company or body corporate governed by any special Act In this ar cle we will try to include all the mandatory compliances that are to be made by every Small Company immediately a er incorpora on and yearly onward.

Mandatory Compliances: GENERAL POST INCORPORATION COMPLIANCES 1. Affix A Board Outside Registered Office: Every Small Company shall affix a board outside the office sta ng its name and registered office address.

2. Le er Heads: Le er heads of Small Company with registered office name & address, CIN, Email-ID, Telephone, website (if any), fax etc., shall be printed.

3. PAN/ TAN: The first requirement a er the incorpora on of Small Company is applying for a Permanent Account Number (PAN)/ Tax Deduc on Account Number(TAN). According to amendment made in incorpora on procedure PAN & TAN is integrated with Incorpora on through MCA website at me of Incorpora on. So no need to follow separate procedure for PAN and TAN Applica on.

7. FC-GPR (in case of Non-residents): Form FC-GPR is to be filed within 30 days of allotment (issue of share cer ficates in this case) with the AD bank.

This filing is done online now. The link for the website has been provided below:

Ebiz indias G2B portal- Fc-GPR 8. Stamp Duty: Stamp Duty is to be paid within 30 days of Issue of Share Cer ficates. Stamp Duty varies from State to State and is therefore determined by the place (state) in which the registered office of the Small Companies is situated.

9. 1ST Board Mee ng: In order to sa sfy the requirement of appoin ng the 1st Auditor of the company within 1 month from the registra on of the small company (as per the requirement of Sec on 139(6) of the Companies Act, 2013), the Company shall convene its 1st Board Mee ng within 30 days from the date of incorpora on to consider the following ma ers: a. Taking on record the Cer ficate of Incorpora on/ maintain the copies of Incorpora on documents, b. No ng of Registered Office address of the Company, c. No ng of 1st directors, d. Approval of preliminary expenses, e. Approval for opening of a Current Account, f. Appointment of 1st Statutory Auditors, g. Approval of Common Seal. h. Authoriza on for Statutory registra ons.

4. Bank Account: A er obtaining PAN Small Company shall open a Current Account with a bank and the promoters shall contribute the subscrip on money to the said account.

5. Inward Remi ances From Non-Residents: In case the subscribers are non-residents, the share subscrip on money shall come by way of Inward remi ance. KYC and Inward remi ance repor ng is to be done within 30 days with the Authorized Dealer Bank. The AD Bank shall issue UIN no. Now, all these filings have to be done online. The link for the website has been provided below:

Ebiz indias G2B portal- Advance foreign Remi ance 6. Issue Of Share Cer ficates: Small company shall issue Share Cer ficates to the subscribers of Memorandum within 60 days from the date of company incorpora on. Please ensure that Share subscrip on money is received before issuing Share cer ficates through proper banking channel.

www.Venture-Care.com/Magazine

September 2017

25

10. Appointment of first Auditor of Small Company within 30 days of Incorpora on: Sec on 139 (6) of the Companies Act, 2013 requires Small Company to appoint its Auditor within 30 days from its Incorpora on.

Auditor will be appointed for 1 year ll the conclusion of first AGM. 11. 1ST Annual General Mee ng: A newly incorporated Small Company is required to hold its first Annual General Mee ng within the period of 9 months from closing of its first financial year.

12. Service Tax/ VAT/ IEC Registra ons: All the statutory registra ons like Service Tax, VAT, IEC (Import Export Code) etc. may be applied for, depending on the type of the Small Company.

13. Provident Fund: A Small company employing more than 20 employees is liable to deduct PF contribu on @ 12% of basic salary & ESIC @ 4.75% of salary(As per the latest no fica on, ESIC has raised the threshold wage limit from 15,000 to 21,000).

14. Maintain Statutory Registers, Minute Books: A small Company shall maintain all the statutory books, registers and minute books as stated in the Companies Act, 2013. Non-maintenance shall a ract penal provisions.

15. Register Of Members: The name of the subscribers to be entered in the Register of Member with date of incorpora on of Small Companyas the date when subscribers are deemed to have become members of Small Company.

www.Venture-Care.com/Magazine

ANNUAL COMPLIANCES 1. Mee ng of Board of Directors: It is mandatory for Small Company to hold at-least two Board Mee ngs in a year and there should be minimum gap of 90 days between two board mee ng (where there are more than two board mee ngs then me gap of 90 days is not required).

2. Annual General Mee ng: It is mandatory for every Small Company to hold an AGM in every Calendar Year. Companies are required to hold their AGM within a period of six months, from the date of closing of the Financial Year. Time gap between two AGM should not exceed 15 Months.

The AGM should not be held on public holidays. It should be held during business hours and at the registered office of the company, whether it is a city or village.

3. Minutes of proceedings of Mee ng of Board of Directors, General Mee ng: It is mandatory for every Small Companyto cause minutes of the proceedings of every mee ng of Board of Directors, General mee ng within 30 days of conclusion of mee ng concerned. Minutes should be entered in the Minutes Book within thirty days from the date of conclusion of the Mee ng.

Minutes of the Mee ng of the Board or Commi ee should be signed and dated by the Chairman of the Mee ng or the Chairman of next Mee ng.

Minutes of a General Mee ng should be signed and dated by the Chairman of the mee ng or in the event of death or inability of the Chairman, by any director duly authorized by the Board for the purpose, within thirty days of the General Mee ng.

September 2017

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4. Filling of Disclosure of interest by Directors& Disclosure regarding Non Disqualifica on: Director of every Small Company are required to give disclosures about their interest in any other business en ty in first Board Mee ng in which they par cipate as a Director and therea er in First Board Mee ng of every financial year in FORM MBP-1 to Small Company.

Every Director of Small Companyin each Financial Year will file DIR -8(disclosure of non-disqualifica on) with Small Company.

5. Filling of Financial Statements or Financial Results: Every Small Company is required to file its Financial Statements within 30 days of its Annual General Mee ng with Registrar of Company in E-FORMAOC-4

8. Maintenance of Statuary Registers: Following registers are required to be maintained by every Small Company: MGT-1: Register of Members MGT-2: Register of Debenture Holders MGT-3: Foreign register of members, Debenture Holders other security Holders or beneficiary residing outside India.

FORM SH-2: Register of renewed and duplicate share cer ficate FORM SH-3: Register of Sweat Equity Shares FORM SH-6: Register of Employee Stock Op ons.

FORM SH-10: Register of Shares or Securi es bought back FORM CH-7: Register of Charges

Non-Compliance

6. Filling of Annual Return: If Small Company fails to comply with the rules and It is mandatory for every company to file its Annual Return with Registrar of Companies within 60 days of Annual regula ons of the Companies Act, then Small Company and every officer who is in default shall be punishable with fine General Mee ng in E-FORM MGT-7. for the period for which default con nues.

7. Appointment of Auditor If there is delay in any filing, then addi onal fees is An Auditor will be appointed for term of One year in AGM required to be paid, which keeps on increasing as the me for next financial year and the small company needs to file period of non-compliance increases. form ADT -1 within 15 days from AGM date.

The Addi onal Filing fees depends upon two factors namely Normal filing fees and the me period delay in filing forms.

Period of Delay

Additional Fees

Upto 30 days

2 times of normal fees

> 30 days upto 60 days

4 times of normal fees

> 60 days upto 90 days

6 times of normal fees

> 90 days upto 180 days

10 times of normal fees

More than 180 days

12 times of normal fees

www.Venture-Care.com/Magazine

September 2017

27

ANNUAL COMPLIANCE FOR Public Limited Company Companies incorporated in India are primarily regulated by the recently enacted Companies Act, 2013. The Companies Act, 2013, provides much legal compliance that are to be made by every Public company like repor ng of ďŹ nancial results, repor ng of changes in management, maintenance of statuary registers, audi ng of accounts etc.

www.Venture-Care.com/Magazine

September 2017

28

In this ar cle we will try to include all the mandatory compliances that are to be made by every Public Limited Companyimmediately a er incorpora on and yearly onward.

Mandatory Compliances: GENERAL POST INCORPORATION COMPLIANCES 1. Affix A Board Outside Registered Office: Every a shall affix a board outside the office sta ng its name and registered office address.

2. Le er Heads: Le er heads of a Company with registered office name & address, CIN, Email-ID, Telephone, website (if any), fax etc., shall be printed.

3. PAN/ TAN: The first requirement a er the incorpora on of a Company is applying for a Permanent Account Number (PAN)/ Tax Deduc on Account Number(TAN). According to amendment made in incorpora on procedure PAN & TAN is integrated with Incorpora on through MCA website at me of Incorpora on. So no need to follow separate procedure for PAN and TAN Applica on.

4. Bank Account: A er obtaining PAN a Company shall open a Current Account with a bank and the promoters shall contribute the subscrip on money to the said account.

5. Inward Remi ances From Non-Residents: In case the subscribers are non-residents, the share subscrip on money shall come by way of Inward remi ance. KYC and Inward remi ance repor ng is to be done within 30 days with the Authorized Dealer Bank. The AD Bank shall issue UIN no. Now, all these filings have to be done online. The link for the website has been provided below:

Ebiz indias G2B portal- Advance foreign Remi ance 6. Issue Of Share Cer ficates: company shall issue Share Cer ficates to the subscribers of Memorandum within 60 days from the date of company incorpora on. Please ensure that Share subscrip on money is received before issuing Share cer ficates through proper banking channel.

www.Venture-Care.com/Magazine

7. FC-GPR (in case of Non-residents): Form FC-GPR is to be filed within 30 days of allotment (issue of share cer ficates in this case) with the AD bank.

This filing is done online now. The link for the website has been provided below:

Ebiz indias G2B portal- Fc-GPR 8. Stamp Duty: Stamp Duty is to be paid within 30 days of Issue of Share Cer ficates. Stamp Duty varies from State to State and is therefore determined by the place (state) in which the registered office of the Small Companies is situated.

9. 1ST Board Mee ng: In order to sa sfy the requirement of appoin ng the 1st Auditor of the company within 1 month from the registra on of the small company (as per the requirement of Sec on 139(6) of the Companies Act, 2013), the Company shall convene its 1st Board Mee ng within 30 days from the date of incorpora on to consider the following ma ers: a. Taking on record the Cer ficate of Incorpora on/ maintain the copies of Incorpora on documents, b. No ng of Registered Office address of the Company, c. No ng of 1st directors, d. Approval of preliminary expenses, e. Approval for opening of a Current Account, f. Appointment of 1st Statutory Auditors, g. Approval of Common Seal (if any), (use common seal has been made op onal since 2015). h. Authoriza on for Statutory registra ons.

10. Appointment of first Auditor of Small Company within 30 days of Incorpora on: Sec on 139 (6) of the Companies Act, 2013 requires a Company to appoint its Auditor within 30 days from its Incorpora on.

September 2017

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If Board of directors failed to do so then they shall inform the same to members and members are required to appoint company Auditor within 90 days at an EGM. The Auditor will have to hold office to comple on of first AGM. The Company need not to file Form ADT-1 as these provision are applicable to auditors appointed under Sec on 139 (1) of the Companies Act, 2013.This mean filing of form ADT-1 is not required for First Auditor under Companies Act, 2013.

Auditor will be appointed for 1 year ll the conclusion of first AGM except following. a) All Unlisted Public Companies with Paid-up Share Capital >= Rs. 10 crores, or, b) All Companies with Paid-up Share Capital less than the threshold limit men oned above, but having public borrowings from financial ins tu ons, banks or public deposits >= Rs. 50 crores Will appoint auditor for the 5 (Five) year and form ADT-1 will be filed for 5-year appointment within 15 days of AGM. A er that every year in AGM shareholder will ra fy the Auditor but there is no need to file ADT-1 An individual as auditor for more than 1 term of 5 consecu ve years; and An audit firm as auditor for more than 2 terms of 5 consecu ve years.

11. 1ST Annual General Mee ng: A newly incorporated a Company is required to hold its first Annual General Mee ng within the period of 9 months from closing of its first financial year.

12. Service Tax/ VAT/ IEC Registra ons: All the statutory registra ons like Service Tax, VAT, IEC (Import Export Code) etc. may be applied for, depending on the type of the Company.

13. Provident Fund: A company employing more than 20 employees is liable to deduct PF contribu on @ 12% of basic salary & ESIC @ 4.75% of salary(As per the latest no fica on, ESIC has raised the threshold wage limit from 15,000 to 21,000).

14. Maintain Statutory Registers, Minute Books: A Company shall maintain all the statutory books, registers and minute books as stated in the Companies Act, 2013. Non-maintenance shall a ract penal provisions.

15. Register Of Members: The name of the subscribers to be entered in the Register of Member with date of incorpora on of a Company the date when subscribers are deemed to have become members of the Company.

ANNUAL COMPLIANCES 1. Mee ng of Board of Directors: The Company is required to hold 4 mee ngs in every financial year in such a manner that the gap between 2 Board Mee ngs should not be more than 120 days. There should be 1 Board Mee ng in one Quarter.

Two directors should be present at the board mee ng, or if there are more than two directors, 1/3rd of the total directors should a end the board mee ngs.

2. Annual General Mee ng: It is mandatory for every Company to hold an AGM in every Calendar Year. Companies are required to hold their AGM within a period of six months, from the date of closing of the Financial Year.Time gap between two AGM should not exceed 15 Months.

The AGM should not be held on public holidays. It should be held during business hours and at the registered office of the company, whether it is a city or village.

3. Minutes of proceedings of Mee ng of Board of Directors, General Mee ng: It is mandatory for every company to cause minutes of the proceedings of every mee ng of Board of Directors, General mee ng within 30 days of conclusion of mee ng concerned. Minutes should be entered in the Minutes Book within thirty days from the date of conclusion of the Mee ng.

Minutes of the Mee ng of the Board or Commi ee should be signed and dated by the Chairman of the Mee ng or the Chairman of next Mee ng.

Minutes of a General Mee ng should be signed and dated by the Chairman of the mee ng or in the event of death or inability of the Chairman, by any director duly authorized by the Board for the purpose, within thirty days of the General Mee ng.

www.Venture-Care.com/Magazine

September 2017

30

4. Filling of Disclosure of interest by Directors& Disclosure regarding Non Disqualifica on: Director of every company are required to give disclosures about their interest in any other business en ty in first Board Mee ng in which they par cipate as a Director and therea er in First Board Mee ng of every financial year in FORM MBP-1 to the Company.

Every Director of the Company in each Financial Year will file DIR -8(disclosure of non-disqualifica on) with the Company.

5. Adop on of Financials and Director Report: Every Company has to adopt Financial and Director Report of the Company in there Board Mee ng and has to file E Form MGT-14 along with copy of Board Resolu on within 30 daysof Board Mee ng.

6. Filling of Financial Statements or Financial Results: Every Company is required to file its Financial Statements within 30 days of its Annual General Mee ng with Registrar of Company in E-FORMAOC-4 7. Filling of Annual Return: It is mandatory for every company to file its Annual Return with Registrar of Companies within 60 days of Annual General Mee ng in E-FORM MGT-7.

Annual Return of all Public Limited Company has to be sign

by Company Secretary in Prac ce by affixing DSC on E Form MGT -7.

8. Annual Return Cer fica on: Annual Return of every unlisted public company having share capital of Rs. 10 crore or more or turnover of Rs. 50 crore or more has to be cer fied by Prac cing Company Secretaries of India in Form no. MGT-8.

9. Appointment of Auditor: An Auditor will be appointed for term of One year in AGM for next financial year and the company needs to file form ADT -1 within 15 days from AGM date.

Auditor will be appointed for the 5 (Five) year and form ADT-1 will be filed for 5-year appointment. A er that every year in AGM shareholder will ra fy the Auditor but there is no need to file ADT-1 An individual as auditor for more than 1 term of 5 consecu ve years; and An audit firm as auditor for more than 2 terms of 5 consecu ve years.

The Companies to which the above provision is applicable are: a) All Unlisted Public Companies with Paid-up Share Capital >= Rs. 10 crores, or, b) All Companies with Paid-up Share Capital less than the threshold limit men oned above, but having public borrowings from financial ins tu ons, banks or public deposits >= Rs. 50 crores

www.Venture-Care.com/Magazine

10. Maintenance of Statuary Registers: Following registers are required to be maintained by every company: MGT-1: Register of Members MGT-2: Register of Debenture Holders MGT-3: Foreign register of members, Debenture Holders other security Holders or beneficiary residing outside India.

FORM SH-2: Register of renewed and duplicate share cer ficate FORM SH-3: Register of Sweat Equity Shares FORM SH-6: Register of Employee Stock Op ons.

FORM SH-10: Register of Shares or Securi es bought back FORM CH-7: Register of Charges

Non-Compliance If a Company fails to comply with the rules and regula ons of the Companies Act, then the Company and every officer who is in default shall be punishable with fine for the period for which default con nues.

If there is delay in any filing, then addi onal fees is required to be paid, which keeps on increasing as the me period of non-compliance increases.

The Addi onal Filing fees depends upon two factors namely Normal filing fees and the me period delay in filing forms.

September 2017

31

Period of Delay

Additional Fees

Upto 30 days

2 times of normal fees

> 30 days upto 60 days

4 times of normal fees

> 60 days upto 90 days

6 times of normal fees

> 90 days upto 180 days

10 times of normal fees

More than 180 days

12 times of normal fees

EVENT BASECOMPLIANCES: 1. Secretarial Audit Report: According to Sec on 204 (1) of the Companies Act 2013 mandates Secretarial Audit for every public company having a paid-up share capital of 50crore rupees or more; or every public company having a turnover* of 250crore rupees or more.

2. Audit Commi ee: According to Sec on 177 of the Companies Act 2013 following Public Limited Companies shall cons tute Audit Commi ee.

(I) all public companies with a paid up capital of Rs.10 Crores or more; or (ii) all public companies having turnover of Rs.100 Crores or more; or (iii) all public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding Rs.50 Crores or more.

The paid up share capital or turnover or outstanding loans, or borrowings or debentures or deposits, as the case may be, as exis ng on the date of last audited Financial Statements shall be taken into account 3. Nomina on & Remunera on Commi ee: According to Sec on 178 of the Companies Act 2013 following Public Limited Companies shall cons tute Nomina on and Remunera on Commi ee (I) all public companies with a paid up capital of Rs.10 Crores or more; or (ii) all public companies having turnover of Rs.100 Crores or more; or (iii) all public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding Rs.50 Crores or more.

The paid up share capital or turnover or outstanding loans, or borrowings or debentures or deposits, as the case may be, as exis ng on the date of last audited Financial Statements shall be taken into account

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4. Appointment of Independent Director: According to Sec on 149 (6) an independent director in rela on to a company, means a director other than a managing director or a whole- me director or a nominee director.

The Following Public Limited Companies shall have at least 2 directors as independent directors: (I) all public companies with a paid up capital of Rs.100 Crores or more; or (ii) all public companies having turnover of Rs.300 Crores or more; or (iii) all public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding Rs.200 Crores or more.

5. Establishment of Vigil Mechanism: Following Public Limited Companies shall establish a vigil mechanism for their directors and employees to report their genuine concerns or grievances(I) Companies which accept deposits from the public (ii) Companies which have borrowed money from Banks and PFI in excess of Rs.50 Crores.

Companies which are not required to cons tute Audit Commi ee shall nominate a director to play the role of audit commi ee for the purpose of vigil mechanism to whom other directors and employees may report their concerns.

The details of establishment of Vigil mechanism shall be disclosed by the company in the website, if any, and in the Board's Report.

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6. Appointment of Woman Director: As per second Proviso to Sec on 149(1) the following class of Public companies is required to appoint at least one Woman Director(I) All Public Companies Having Paid up capital of Rs.100 crores or more; or (ii) All public companies having turnover of Rs.300 Crores or more; or 7. Appointment of Internal Auditor: As per sec on 138 of Companies Act 2013 certain class of companies is required to appoint Internal Auditors.

The following class of Public Limited companies shall be required to appoint an internal auditor or a firm of internal auditors, namely:(a) paid up share capital of 50Cr rupees or more during the preceding financial year; or (b) turnover(income) of 200Cr rupees or more during the preceding financial year; or (c) outstanding loans or borrowings from banks or public financial ins tu ons exceeding 100Cr rupees or more at any point of me during the preceding financial year; or (d) outstanding deposits of 25Cr rupees or more at any point of me during the preceding financial year; and

Eligibility Criteria: Every Company (whether public/private/foreign company) having either of following.

I. Net Worth of 500 crore or more, ii. Turnover of 1000 crore or more, iii. Net profit of 5 crore or more, During any financial year shall be required to follow the CSR provisions.

9. Appointment of Company Secretary: As per sec on 203 of Companies Act 2013 every listed Company and every public company having paid up share capital of rupees 5 Cr or more shall have whole- me Company Secretary in employment. And as per sec on 203 of Companies Act 2013 above specified company also need to appoint whole- me-key managerial personnel and as per Sec on 2(51) of the Companies Act 2013 Company Secretary also covered under the defini on of Key managerial personnel.

10. Applicability of XBRL Following class of companies shall file their Balance sheet in XBRL format.

(I) All companies listed in India and their subsidiaries, including overseas subsidiaries; (ii) All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 crore or above.

8. Corporate Social Responsibility: Corporate Social Responsibility (CSR), a term widely use for Provided that company in Banking, Insurance, Power and defining the responsibili es of Corporate world towards the NBFC need not to file financial Statement in XBRL format. society & environment. In order to encourage more en es to par cipate in CSR, the Government of India has actually implemented the concept of CSR in the new Companies Act 2013.

Sec on 135 of Companies Act 2013, provides that every specified company shall spend at least 2% of average net profit made during immediate three preceding financial years on CSR on projects and programs specified in Schedule VII of companies act 2013

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ANNUAL COMPLIANCE FOR LISTED COMPANY. Companies incorporated in India are primarily regulated by the recently enacted Companies Act, 2013. The Companies Act, 2013, provides much legal compliance that are to be made by every Listed company like repor ng of ďŹ nancial results, repor ng of changes in management, maintenance of statuary registers, audi ng of accounts etc.

In this ar cle we will try to include all the mandatory ROC compliances that are to be made by every Listed Company immediately a er incorpora on and yearly onward.

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Mandatory Compliances: GENERAL POST INCORPORATION COMPLIANCES 1. Affix A Board Outside Registered Office: Every Company shall affix a board outside the office sta ng its name and registered office address 2. Le er Heads: Le er heads of the company with registered office name & address, CIN, Email-ID, Telephone, website (if any), fax etc., shall be printed.

3. PAN/TAN: The first requirement a er the incorpora on of a company is applying for a Permanent Account Number (PAN)/ Tax Deduc on Account Number(TAN). According to amendment made in incorpora on procedure PAN & TAN is integrated with Incorpora on through MCA website at me of Incorpora on. So no need to follow separate procedure for PAN and TAN Applica on.

4. Bank Account: A er obtaining PAN, the company shall open a Current Account with a bank and the promoters shall contribute the subscrip on money to the said account.

5. Inward Remi ances From Non-Residents: In case the subscribers are non-residents, the share subscrip on money shall come by way of Inward remi ance.

KYC and Inward remi ance repor ng is to be done within 30 days with the Authorized Dealer Bank. The AD Bank shall issue UIN no. Now, all these filings have to be done online.

The link for the website has been provided below:

Ebiz indias G2B portal- Advance foreign Remi ance

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6. Issue Of Share Cer ficates: Company shall issue Share Cer ficates to the subscribers of Memorandum within 60 days from the date of company incorpora on. Please ensure that Share subscrip on money is received before issuing Share cer ficates through proper banking channel.

7. FC-GPR (in case of Non-residents): 30 days of allotment (issue of share cer ficates in this case) with the AD bank. This filing is done online now. The link for the website has been provided below:

Ebiz indias G2B portal- Fc-GPR 8. Stamp Duty: Stamp Duty is to be paid within 30 days of Issue of Share Cer ficates. Stamp Duty varies from State to State and is therefore determined by the place (state) in which the registered office of the Company is situated.

9. 1ST Board Mee ng: In order to sa sfy the requirement of appoin ng the 1st Auditor of the company within 1 month from the registra on of the company (as per the requirement of Sec on 139(6) of the Companies Act, 2013), the Company shall convene its 1st Board Mee ng within 30 days from the date of incorpora on to consider the following ma ers: I. Taking on record the Cer ficate of Incorpora on/ maintain the copies of Incorpora on documents, ii. No ng of Registered Office address of the Company, iii. No ng of 1st directors, iv. Approval of preliminary expenses, v. Approval for opening of a Current Account,

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vi. Appointment of 1st Statutory Auditors, vii. Approval of Common Seal (if any), (use of Common Seal has been made op onal since 2015). ix. Authoriza on for Statutory registra ons.

And other resolu on as required for listed companies 10. Appointment of first Auditor of the company within 30 days of Incorpora on: Sec on 139 (6) of the Companies Act, 2013 requires a company to appoint its Auditor within 30 days from its Incorpora on.

If Board of directors failed to do so then they shall inform the same to members and members are required to appoint company Auditor within 90 days at an EGM. The Auditor will have to hold office to comple on of first AGM. The Company need not to file Form ADT-1as these provision are applicable to auditors appointed under Sec on 139 (1) of the Companies Act, 2013.This mean filing of form ADT-1 is not required for First Auditor under Companies Act, 2013.

Auditor will be appointed for the 5 (Five) year and form ADT-1 will be filed for 5-year appointment within 15 days of AGM. A er that every year in AGM shareholder will ra fy the Auditor but there is no need to file ADT-1 An individual as auditor for more than 1 term of 5 consecu ve years; and An audit firm as auditor for more than 2 terms of 5 consecu ve years.

11. 1ST Annual General Mee ng: A newly incorporated Company is required to hold its first Annual General Mee ng within the period of 9 months from closing of its first financial year.

12. Service Tax/ VAT/ IEC Registra ons: All the statutory registra ons like Service Tax, VAT, IEC (Import Export Code) etc. may be applied for, depending on the type of the Company.

13. Provident Fund: A company employing more than 20 employees is liable to deduct PF contribu on @ 12% of basic salary & ESIC @ 4.75% of salary(As per the latest no fica on, ESIC has raised the threshold wage limit from 15,000 to 21,000).

14. Maintain Statutory Registers, Minute Books: Company shall maintain all the statutory books, registers and minute books as stated in the Companies Act, 2013. Non -maintenance shall a ract penal provisions.

15. Register Of Members: The name of the subscribers to be entered in the Register of Member with date of incorpora on of the company as the date when subscribers are deemed to have become members of the company.

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ANNUAL COMPLIANCES 1. Mee ng of Board of Directors: The Company is required to hold 4 mee ngs in every financial year in such a manner that the gap between 2 Board Mee ngs should not be more than 120 days. There should be 1 Board Mee ng in one Quarter.

Two directors should be present at the board mee ng, or if there are more than two directors, 1/3rd of the total directors should a end the board mee ngs.

Listed Company unaudited accounts needs to approve in Board Mee ng, which shall held in 45 days from end of each quarter. Last quarter it can be held in 60 days from end of last quarter for approval of Audited accounts.

2. Annual General Mee ng: It is mandatory for every Company to hold an AGM in every Calendar Year. Companies are required to hold their AGM within a period of six months, from the date of closing of the Financial Year.Time gap between two AGM should not exceed 15 Months.

The AGM should not be held on public holidays. It should be held during business hours and at the registered office of the company, whether it is a city or village.

3. Report on AGM: This is the new provision introduced by the Companies Act ,2013, which mandates the report on AGM for all listed public companies.

Every listed public company shall prepare in the prescribed manner a report on each AGM including the confirma on to the effect that the mee ng was convened, held and conducted as per the provisions of this Act and the rules made there under.

The copy of the report shall be filed with the Registrar in E Form No. MGT.15 within 30 days of the conclusion of the annual general mee ng

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4. Minutes of proceedings of Mee ng of Board of Directors, General Mee ng: It is mandatory for every company to cause minutes of the proceedings of every mee ng of Board of Directors, General mee ng within 30 days of conclusion of mee ng concerned. Minutes should be entered in the Minutes Book within thirty days from the date of conclusion of the Mee ng.

Minutes of the Mee ng of the Board or Commi ee should be signed and dated by the Chairman of the Mee ng or the Chairman of next Mee ng.

Minutes of a General Mee ng should be signed and dated by the Chairman of the mee ng or in the event of death or inability of the Chairman, by any director duly authorized by the Board for the purpose, within thirty days of the General Mee ng.

8. Filling of Annual Return: It is mandatory for every company to file its Annual Return with Registrar of Companies within 60 days of Annual General Mee ng in E-FORM MGT-7.

Annual Return of all Listed Company has to be sign by Company Secretary in Prac ce by affixing DSC on E Form MGT -7.

9. Annual Return Cer fica on: Annual Return of every listed company has to be cer fied

by Prac cing Company Secretaries of India in Form no.

MGT-8.

10. Appointment of Auditor:

5. Filling of Disclosure of interest by Directors& Disclosure regarding Non Disqualifica on: Director of every company are required to give disclosures about their interest in any other business en ty in first Board Mee ng in which they par cipate as a Director and therea er in First Board Mee ng of every financial year in FORM MBP-1 to the Company.

Every Director of the Company in each Financial Year will file DIR -8(disclosure of non-disqualifica on) with the Company.

6. Adop on of Financials and Director Report: Every Company has to adopt Financial and Director Report of the Company in there Board Mee ng and has to file E Form MGT-14 along with copy of Board Resolu on within 30 daysof Board Mee ng.

7. Filling of Financial Statements or Financial Results: Every Company is required to file its Financial Statements within 30 days of its Annual General Mee ng with Registrar of Company in E-FORMAOC-4 XBRL

An Auditor will be appointed for term of Five year in AGM and the company needs to file form ADT -1 within 15 days from AGM date.

Auditor will be appointed for the 5 (Five) year and form ADT-1 will be filed for 5-year appointment. A er that every year in AGM shareholder will ra fy the Auditor but there is no need to file ADT-1 (a) An individual as auditor for more than 1 term of 5 consecu ve years; and (b) An audit firm as auditor for more than 2 terms of 5 consecu ve years.

11. Maintenance of Statuary Registers: Following registers are required to be maintained by every company: MGT-1: Register of Members MGT-2: Register of Debenture Holders MGT-3: Foreign register of members, Debenture Holders other security Holders or beneficiary residing outside India.

FORM SH-2: Register of renewed and duplicate share cer ficate FORM SH-3: Register of Sweat Equity Shares FORM SH-6: Register of Employee Stock Op ons.

FORM SH-10: Register of Shares or Securi es bought back FORM CH-7: Register of Charges

Non-Compliance If a Company fails to comply with the rules and regula ons of the Companies Act, then the Company and every officer who is in default shall be punishable with fine for the period for which default con nues.

If there is delay in any filing, then addi onal fees is required to be paid, which keeps on increasing as the me period of non-compliance increases The Addi onal Filing fees depends upon two factors namely Normal filing fees and the me period delay in filing forms.

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Period of Delay

Additional Fees

Upto 30 days

2 times of normal fees

> 30 days upto 60 days

4 times of normal fees

> 60 days upto 90 days

6 times of normal fees

> 90 days upto 180 days

10 times of normal fees

More than 180 days

12 times of normal fees

EVENT BASE COMPLIANCES: 1. Secretarial Audit Report: According to Sec on 204 (1) of the Companies Act 2013 mandates Secretarial Audit for every Listed company. It should form a part of Annual Report of the Company.

2. Audit Commi ee: According to Sec on 177 of the Companies Act 2013Every Listed Company shall cons tute Audit Commi ee.

3. Nomina on & Remunera on Commi ee: According to Sec on 178 of the Companies Act 2013every listed Company shall cons tute Nomina on and Remunera on Commi ee.

4. Stake Holder Rela onship Commi ee: A Listed Company is required to cons tute its Stake Holder Rela onship Commi ee.

5. Appointment of Independent Director: According to Sec on 149 (6) an independent director in rela on to a company, means a director other than a managing director or a whole- me director or a nominee director.

Every Listed Company shall have at least 1/3 of total number of directors on their Board of Directors as independent directors.

6. Establishment of Vigil Mechanism: All listed Companies shall establish a vigil mechanism for their directors and employees to report their genuine concerns or grievances-

7. Appointment of Woman Director: All listed companies are required to appoint at least one Woman Director8. Appointment of Internal Auditor: listed companies are required to appoint Internal Auditors.

9. Corporate Social Responsibility: Corporate Social Responsibility (CSR), a term widely use for defining the responsibili es of Corporate world towards the society & environment. In order to encourage more en es to par cipate in CSR, the Government of India has actually implemented the concept of CSR in the new Companies Act 2013.

Sec on 135 of Companies Act 2013, provides that every specified company shall spend at least 2% of average net profit made during immediate three preceding financial years on CSR on projects and programs specified in Schedule VII of companies act 2013

Eligibility Criteria: Every Company (whether public/private/foreign company) having either of following.

I. Net Worth of 500 crore or more, ii. Turnover of 1000 crore or more, iii. Net profit of 5 crore or more, During any financial year shall be required to follow the CSR provisions.

The details of establishment of Vigil mechanism shall be disclosed by the company in the website, if any, and in the Board's Report.

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10. Appointment of Company Secretary:

Provided that company in Banking, Insurance, Power and NBFC need not to file financial Statement in XBRL format.

As per sec on 203 of Companies Act 2013 every listed Company shall have whole- me Company Secretary in 12. Return for change in Stake of promoter: employment. And as per sec on 203 of Companies Act 2013 Listed Company shall file a return with the Registrar with above specified company also need to appoint whole- me- respect to change in the number of shares held by key managerial personnel and as per Sec on 2(51) of the promoters and top ten shareholders of such Company, Companies Act 2013 Company Secretary also covered under within fi een days of such change. the defini on of Key managerial personnel.

13. Return of Deposit: A Company if accept deposit during the year then it is 11. Applicability of XBRL required to file return of deposits in E Form DPT -3within Following class of companies shall file their Balance sheet 30 days of end of financial year. in XBRL format.

(I) All companies listed in India and their subsidiaries, including overseas subsidiaries; (ii) All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 crore or above.

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ANNUAL COMPLIANCE FOR LIMITED LIABILITY PARTNERSHIP FIRM (LLP)

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A Limited Liability Partnership (LLP) has just a couple of compliance requirements each year. This is extremely low, as compared to the several requirements placed on a private limited company. However, the fines are also larger.

In this ar cle we will try to include all the mandatory compliances that are to be made by every LLP immediately a er incorpora on and yearly onward.

Mandatory Compliances: GENERAL POST INCORPORATION COMPLIANCES 1. Filing LLP Agreement: Every LLP has to file E Form-3 Filing of LLP agreement within 30 days from date of incorpora on of LLP. 2. Le er Heads: Le er heads of LLP with registered office name & address, LLPIN, Email-ID, Telephone, website (if any), fax etc., shall be printed.

3. PAN/ TAN: The first requirement a er the incorpora on of LLP is applying for a Permanent Account Number (PAN)/ Tax Deduc on Account Number(TAN).

4. Bank Account: A er obtaining PAN, the LLP shall open a Current Account with a bank and Designated Partners shall contribute the subscrip on money to the said account.

5. Service Tax/ VAT: All the statutory registra ons like Service Tax, VAT etc. may be applied for depending on the type of LLP. 6. Provident Fund: A LLP employing more than 20 employees is liable to deduct PF contribu on @ 12% of basic salary & ESIC @ 4.75% of salary(As per the latest no fica on, ESIC has raised the threshold wage limit from 15,000 to 21,000).

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ANNUAL COMPLIANCES 1. Filing of Annual Return Every LLP has to file Annual Return with the Registrar of LLP in E Form-11 within 60 days of closure of its financial year. An LLP has to close its financial year on every 31st March. So, the Annual Return is to be filed on or before 30th May every year.

This form is a summary of the management affairs of the LLP, such as number of partners and their names.

2. Filling of Annual Accounts –Statement of Accounts & Solvency: Every LLP has to file Annual Accounts to Registrar of LLP in E Form-8within 30 days from the end of 6 months of such financial year. So, the filing of Accounts is to be filed on or before 30th October every year.

In case of an LLP whose annual turnover exceeds Rs.40 lakhs or whose contribu on exceeds Rs.25 lakhs, shall be required to get its accounts audited by a qualified Chartered Accountant.

Non-Compliance If a LLP fails to file Annual Return or Annual Accounts within deadline will lead to fine of Rs.100 per day. There is no maximum limit on fine imposed by registrar on LLP on late filing of documents like Private Limited Company.

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ANNUAL COMPLIANCE FOR NIDHI COMPANY (LLP) Nidhi Company means a company which has been incorporated as a Nidhi with the object of Cul va ng the habit of thri and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual beneďŹ t.

In this ar cle we will try to include all the mandatory compliances that are to be made by every Nidhi Company immediately a er incorpora on and yearly onward.

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Mandatory Compliances: GENERAL POST INCORPORATION COMPLIANCES

Every Nidhi Company has to follow all compliance of Public Limited company except some compliance as state below: Every Nidhi shall, within a period of one year from the commencement of these rules, ensure that it has— Minimum number of members should be 200; Net owned funds shall be Rs.10,00,000/- or more ('Net owned funds' means the aggregate of paid up equity share capital and free reserved as reduced by the accumulated and intangible assets appearing in the last audited balance sheet); Ra o of net owned funds to deposit shall be not more than 1:20; Unencumbered term deposits of not less than 10% of the outstanding deposits as specified in Rule 14.

ANNUAL COMPLIANCES 1. FORM NDH-1 Within 90 days from the closure of the first financial year a er its incorpora on and where applicable, the second financial year, Nidhi Company shall file a return of statutory compliances in E Form NDH – 1 along with such fee as prescribed with the Registrar duly cer fied by a Company Secretary in prac ce or a Chartered Accountant in prac ce or a Cost Accountant in prac ce.

2. FORM NDH-2 If the company is not complying with the above it shall within90 days from the close of the first financial year, apply to the Regional Director in Form NDH -2 along with fee for extension of me and The Regional Director may consider the applica on and pass orders within 30 days of the receipt of the applica on.

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3. FORM NDH-3 Every company covered under Rule 2 shall file half yearly return with the registrar in Form NDH-3 along with such fee as provided in Companies (Registra on Offices and Fees) Rules, 2014 within 30 days from the conclusion of each half year duly cer fied by a company secretary in prac ce or chartered accountant in prac ce or cost accountant in prac ce.

Companies Covered under Rule -2 are following: Every company which had been declared as a Nidhi or Mutual Benefits under Sec on 620A(1)of Companies Act, 1956; Every company func oning on the lines of a Nidhi company or Mutual benefit society but has either not applied for or has applied for and is awai ng no fica on to be a Nidhi or Mutual Benefit Society under Sec on 620A(1)of Companies Act, 1956; Every company incorporated as a Nidhi pursuant to the provisions of Sec on 406of the Companies Act, 2013.

PENALTY: If a company contravenes any of the provisions of the rules the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs.5,000/- and where the contraven on is a con nuing one, with a further fine which may extend to Rs.500/- for every day a er the first during which the contraven on con nues.

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FEMA / RBI Compliances FILING OF FLA RETURN ELIGIBLE COMPANIES TO SUBMIT THE FLA RETURN: The Indian Company which has received Foreign Direct Investment in Indian Company or which have made FDI abroad has to ďŹ le Return with RBI called FLA returns i.e. th

Annual Return in foreign liabili es and assets, by 15 July

'Annual Return on Foreign Liabili es and Assets' is basically replacement of old FC GPR Part B in order to capture the sta s cs rela ng to Foreign Direct Investment (FDI), both inward and outward in a more comprehensive manner as also to align it with interna onal best prac ces.

every year.

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SUBMISSION OF RETURN : RBI has prescribed format of FLA Return as an Excel sheet, which is available on RBI website.

You have to download that excel Sheet and fill the details as required and then mail that excel sheet on fla@rbi.org.in INFORMATION REQUIRED TO BE REPORTED IN FLA RETURN: If the company's accounts are not audited before the due date of submission, i.e. July 15, then the FLA Return should be submi ed based on unaudited (provisional) account.

Once the accounts gets audited and there are revisions from the provisional informa on submi ed by the company, they are supposed to submit the revised FLA return based on audited accounts by end – September.

If Account Closing Period of the company is different from the reference period, then informa on should be given for the reference period on internal assessment.

PARTNERSHIP FIRM'S FLA RETURN FLA Return is required to be submi ed by Registered Partnership Firms (Registered under Partnership Registra on Act) as well, if the Partnership firms, Branches or Trustees have any outward FDI outstanding as on end-March of the repor ng year, then they are required to send a request mail to get a dummy CIN number which will enable them to file the Excel based FLA Return.

If any en ty has already got the dummy CIN number from the previous survey, they should use the same CIN number in the current survey also.

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It is also informed that these dummy CIN numbers are provided by RBI for filling the excel based FLA return only and not for any other purpose.

FILING OF ANNUAL PERFORMANCE REPORT ELIGIBLE COMPANIES TO SUBMIT THE FLA RETURN: An Indian Party which has made an Overseas Direct Investment (ODI) abroad has to submit an Annual Performance Report (APR) in Form ODI Part II to the AD bank by 31 December every year in respect of each Joint Venture (JV) / Wholly Owned Subsidiary (WOS) outside India.

It is per nent to note that FLA Return and APR for ODI are two different returns and the same are required to be submi ed by an Indian en ty having ODI. The APR has to submi ed based on Audited Results of the Company.

Penalty: Non-filing of FLA Return and / or APR (as may be applicable) on or before due date will be treated as a viola on of FEMA and compounding proceedings may be ini ated for viola on of FEMA. Hence, these compliances need to be adhered in a mely manner.

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ANNUAL COMPLIANCE OF BRANCH OFFICE BRANCH office (BO) is setup by a foreign company in India to carry out the BRANCH ac vity for its business. Sec on 2(42) of the Companies Act, 2013, defines a foreign company as a company or a body corporate incorporated outside India and which has a place of business whether by itself or through an agent, in this country. This defini on includes a Branch Office; all the provisions of the Act applying to the company will also apply to the BO. For Establishment of Branch office of foreign Company in India. We have to follow provisions of two Act:

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1. RBI Act 2. Companies Act, 2013 In this ar cle we will try to include all the mandatory compliances under RBI Act and Companies Act, 2013 that are to be made by every Branch Office in India a er incorpora on and yearly onward.

Under Companies Act, 2013 GENERAL POST INCORPORATION COMPLIANCES 1. Affix A Board Outside Registered Office: Every Branch Office shall affix a board outside the office sta ng its name and registered office address.

2. Le er Heads: Le er heads of Branch Office with registered office name & address, FCRN, Email-ID, Telephone, website (if any), fax etc., shall be printed.

3. PAN/ TAN: The first requirement a er the incorpora on of BO is applying for a Permanent Account Number (PAN)/ Tax Deduc on Account Number (TAN).

4. Service Tax/ VAT Registra ons: All the statutory registra ons like Service Tax, VAT etc. may be applied for, depending on the type of BO.

ANNUAL COMPLIANCES 1. Filling of Annual Return: Every BO has to file its Annual Return with ROC in E Form No. FC -4 within 60 days from closure of financial year i.e. by May 30th every year.

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2. Filing of Audited Annual Accounts: Every BO shall file its Audited Annual Accounts along with the list of all principal places of business in India established by foreign company with ROC in E Forms No. FC -3 within six month from end of financial year i.e. by th September 30 every year.

Under RBI Act ANNUAL COMPLIANCES 1. Filing of Annual Ac vity Cer ficate (AAC): Every BO shall file an Annual Ac vity Cer ficate (AACs) with RBI from the Auditors, as at end of March 31, along with the audited Balance Sheet on or before September TH 30 of that year, sta ng that the Branch Office has undertaken only those ac vi es permi ed by Reserve Bank of India.

Note: In case the annual accounts of the BO are finalized with reference to a date other than March 31, the AAC along with the audited Balance Sheet may be submi ed within six months from the due date of the Balance Sheet.

2. Filing of Audited Annual Accounts: Every BO shall file an Audited Annual Accounts of Branch Office with RBI within six month from end of financial year th i.e.by September 30 every year.

September 2017

48

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