What is the importance of compliance?

It is about ensuring that your business is in line with the laws and regulations that affect your business. Whether you are in the industry or not, this is important. If you don’t pay attention to it, you could end up with fines, penalties, and a whole lot of headaches that you don’t need.

Checklist of Public Limited Company Compliance

1. Maintain Accounts

2. Prepare Financial Statements

3. Filling of Annual Returns

4. Income Tax Return

5. Annual General Meeting

6. Board Meetings

7. Director Reports

8. Annual Filling of Forms

9. Yearly Forms by Directors

Advantages of PLP Compliance

1. Establishes Credibility and Transparency 

All businesses must comply with company law, and when they do, they gain the public’s trust. Companies that comply with the law demonstrate to everyone that they are legitimate and that nothing is being hidden from the public.

2. Increases Public Trust 

By maintaining annual compliance, the public and customers will feel more at ease with the company. They will feel that the company is on top of things and is checking itself regularly.

3. Gives You an Edge Over Others 

Maintaining compliance is not just about following the rules; it also gives you an edge over others. You can brag to your customers and investors about your diligence, which is a great way to market yourself and stand out from the rest.

4. Attracts Investors 

Let’s face the facts: no one wants to invest in a company that takes shortcuts. Investors always check the books to see if the company follows the rules. By maintaining compliance, your company will appear trustworthy and attractive to investors.

5. Helps You Maintain Active Status 

If you file on time and follow the proper procedures, you maintain your company’s active status. That’s it.

6. Helps You Provide Accurate Information 

Annual compliance filing helps people know that your numbers are accurate and current. Trust is built this way – no one wants surprises regarding business information.

7. Helps You Avoid Large Fines 

If you miss the deadlines, you will face fines. Annual compliance filing helps you avoid these issues.

8. Helps You Establish Trust with Partners 

By filing on time and sharing your financial information, you establish trust with your business partners. Trust is important.

Public Limited Company Compliance Types

1. Annual Compliance

You have to file your audited financial statements, balance sheet, and director reports (AOC-4) within 30 days of your Annual General Meeting (AGM). The annual return (MGT-7), which includes information about your shareholders, directors, and shareholding structure, is filed within 60 days of the AGM. And then there’s the AGM itself. It’s mandatory. You have to conduct it every year to approve your financial statements. If you have a listed company or a large public company, a secretarial audit (MR-3) is also required.

2. Quarterly/Monthly Compliance

You must conduct at least four board meetings in a year, ensuring that there is no gap of more than 120 days between two meetings. For taxes, you are required to file TDS and GST returns either on a monthly or quarterly basis, depending on your business structure. If you have a listed company, you also have to file your quarterly financial statements, typically as per SEBI requirements.

3. Event-Based Compliance

If there is a change in your board of directors, you need to file DIR-12 within 30 days. If you are shifting your registered office, that’s INC-22. And if you are issuing new shares, you need to file PAS-3 within 30 days. And finally, if you are borrowing money or creating any security, you need to file CHG-1.

4. Other Mandatory Compliances:

Comply with the secretarial standards (SS-I and SS-II) for meetings. Every director has to disclose their interests (MBP-1) at the first board meeting of the year.

Step by Step Process for Compliance

Step 1: Conduct Board Meetings

Conduct the mandatory number of Board Meetings in a year.

Inform the directors in advance.

Maintain proper minutes of all discussions and decisions.

Ensure to adopt any resolutions required for significant business actions.

Step 2: Maintain Statutory Registers and Records

Maintain the Register of Members on a regular basis.

Maintain a proper Register of Directors and Key Managerial Personnel.

Record any transfer of shares or allotment of new shares.

Keep all statutory books at your registered office.

Step 3: Appointment and Compliance with Auditor

Appoint a statutory auditor on schedule.

Ensure your financial statements are audited annually.

Obtain the Auditor’s Report after completion of the audit process.

Step 4: Prepare Financial Statements

Prepare your Balance Sheet, Profit & Loss Account, and Cash Flow Statement.

Obtain the approval of the Board of Directors for these statements. Append the Director’s Report as necessary.

Step 5: Conduct the Annual General Meeting (AGM)

Conduct the AGM within the prescribed time limit. At the meeting, approve the financial statements, issue any dividend, and appoint/re-appoint auditors and directors.

Step 6: File Annual Forms with the ROC

File your Financial Statements using Form AOC-4.

File your Annual Return using Form MGT-7. File all documents on time to avoid late fees or penalties.

Step 7: Handle Tax Compliance

File your Income Tax Return every year.

File your TDS returns every quarter.

Comply with GST if your business is applicable.

Pay all statutory dues on time.

Step 8: Manage Event-Based Compliance

When significant changes occur in your company, such as the appointment of a new director (DIR-12), an increase in the authorized capital, new shares issued (PAS-3), or a charge created or altered, file the relevant forms with the ROC immediately.

Step 9: Meet SEBI and Listing Requirements

If your company is listed on a stock exchange, you must comply with SEBI regulations.

This includes making quarterly financial statements, disclosing the shareholding pattern, adhering to corporate governance requirements, and reporting significant events.

Documents

1. Incorporation and Important Company Documents

- Certificate of Incorporation

- Memorandum of Association (MOA)

- Articles of Association (AOA)

- Company PAN and TAN

- Director Identification Numbers (DINs)

- Proof of Registered Office

2. Financials and Annual Compliance

- Audited financials: Balance Sheet, Profit & Loss, Cash Flow

- Director’s Report

- Auditor’s Report

- Annual Return (Form MGT-7)

- Financial Statement Filing (Form AOC-4)

- Minutes of Board Meetings and AGMs

3. Statutory Registers and Books

- Register of Members

- Register of Directors & KMP

- Register of Charges

- Register of Share Transfers

- Share Certificates

4. Event-Based Compliance

- Copies of Board Resolutions

- Special and Ordinary Resolutions

- Forms filed with ROC, such as DIR-12 for director changes

- Notices for Registered Office changes

- Share Allotment documents

5. Tax Compliance

- Income Tax Returns (ITR)

- TDS Returns

- GST Returns

- PF & ESIC Returns

At Tax Esquire, we believe that Public Limited Company compliance is the backbone of effective corporate management. When you comply with the Companies Act, 2013, you not only remain on the right side of the law but also earn the trust of your investors, the government, and the general public. We are always one step ahead of the game, taking care of the tricky part of the compliance process so that you do not have to worry about paperwork and changes in the law.