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Post Incorporation Compliances-Companies Act 2013

December 4, 2016     by CS Samrish Bhanja

This Blog aims at providing you with all the general post incorporation compliances a company needs to do along with the specific ones based on their applicability.

1.  MAINTAIN A REGISTERED OFFICE (MANDATORY): The Companies which have not filed form for registered office (INC 22)at the time of incorporation, they are required to establish their registered office within 15 days of incorporation and file the said form (all within 15 days).

2.  AFFIX A BOARD OUTSIDE REGISTERED OFFICE: Every Company shall affix a board outside the office stating its name and registered office address.

3.  LETTER HEADS: Letter heads of the company with registered office name & address, CIN, Email-ID, Telephone, website (if any), fax etc., shall be printed.

4.  PAN/ TAN: The first requirement after the incorporation of a company is applying for a Permanent Account Number (PAN)/ Tax Deduction Account Number(TAN).

5.  1ST BOARD MEETING: In order to satisfy the requirement of appointing the 1st Auditor of the company within 1 month from the registration of the company (as per the requirement of Section 139(6) of the Companies Act, 2013), the Company shall convene its 1st Board Meeting within 30 days from the date of incorporation to consider the following matters:

  • Taking on record the Certificate of Incorporation/ maintain the copies of Incorporation documents,
  • Noting of Registered Office address of the Company,
  • Noting of 1st directors,
  • Approval of preliminary expenses,
  • Approval for opening of a Current Account,
  • Appointment of 1st Statutory Auditors,
  • Approval of Common Seal (if any), (use of Common Seal has been made optional since 2015).
  • Authorization for Statutory registrations.

6.  SERVICE TAX/ VAT/ IEC REGISTRATIONS: All the statutory registrations like Service Tax, VAT, IEC (Import Export Code) etc. may be applied for, depending on the type of the Company.

7.  BANK ACCOUNT: After obtaining PAN, the company shall open a Current Account with a bank and the promoters shall contribute the subscription money to the said account.

8.  INWARD REMITTANCES FROM NON-RESIDENTS: In case the subscribers are non-residents, the share subscription money shall come by way of Inward remittance. KYC and Inward remittance reporting 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 India’s G2B Portal – Advance Foreign Remittance

9.  ISSUE OF SHARE CERTIFICATES: Company shall issue Share Certificates to the subscribers of Memorandum within 2 (two) months from the date of company incorporation. Please ensure that Share subscription money is received before issuing Share certificates through proper banking channel.

10.   FC-GPR (in case of Non-residents): Form FC-GPR is to be filed within 30 days of allotment (issue of share certificates in this case) with the AD bank. This filing is done online now. The link for the website has been provided below:

Ebiz India’s G2B Portal – FC-GPR

11.   STAMP DUTY: Stamp Duty is to be paid within 30 days of Issue of Share Certificates. 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.

12.   CERTIFICATE OF COMMENCEMENT OF BUSINESS: With a new era of ease of doing business, the need for obtaining Certificate of commencement of business has been done away with in the Companies (Amendment) Act, 2015 w.e.f. 29th May 2015. Now, no company is required to obtain such certificate.

13.   PROVIDENT FUND: A company employing more than 20 employees is liable to deduct PF contribution @ 12% of basic salary & ESIC @ 4.75% of salary(As per the latest notification, 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 attract penal provisions.

15.   REGISTER OF MEMBERS: The name of the subscribers to be entered in the Register of Member with date of incorporation of the company as the date when subscribers are deemed to have become members of the company.


117 thoughts on “Post Incorporation Compliances-Companies Act 2013

  1. Does a Director/ only share holder of one person company need to deposit the minimum paid up capital into the bank account within 60 or 180days of incorporation? I’m the only share holder , as a director of one person company should I deposit the subscription money myself & issue a certificate with stamp duty on my name ?

    1. There is no time-limit in the Companies Act, 2013 related to deposit of subscription amount. But as per Section 56(4), the company needs to issue Share Certificate to its Subscriber to MOA within 2 months from the date of incorporation. Yes, you have to deposit the amount in the bank account of the Company at the earliest and proceed with further step of stamping of share certificate.

  2. Sir , I just incorporated a one person company. I run the office from home. 1. For the post compliance , as the only Director & Share holder should I submit Share certificate & deposit the share amount in the current account in the name (i.e) of me , if so which document number from MCA? , 2. Should a one person company maintain MOM , if so how should I submit during quarterly , half early , annual basis ? 3. How will I let MCA / ROC know that I have affixed a name board with CIN , have a letter pad / seal / visiting card etc with CIN ready ?

    1. 1. As per Section 9 of the Companies Act, 2013, Once a Company got incorporated, then it is a separate legal entity and therefore you have to deposit the share amount in the current account, prepare Share Certificate and get it Stamped also. There is no need to file any document with MCA for this.
      2. OPC is exempted from conducting meetings of Board Meetings and General Meetings. However, for matters requiring consent of member and/or director under the Companies Act 2013, it shall be communicated by sole member of OPC to the OPC in writing and it shall be recorded in minutes of meetings of OPC.
      3. Compliances under Section 12(1) and Section 12(3) are for self compliance.

  3. Sir our company incorpprated on6/12/16 bit till now no bank a/c is opened and share is not subscribed..what shoud we do now?
    Any penalty is applicable?

    1. Shares are deemed to be allotted to the subscribers on the date of incorporation. As per section 56(4)(a) of Companies Act 2013, every company shall deliver the certificates of all securities allotted within a period of two months from the date of incorporation, in the case of subscribers to the memorandum. Further as per section 56(6) Where any default is made in complying with the provisions of sub-sections (1) to (5) of 56, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees.
      There is no such condition that you cannot issue share certificates without receipt of subscription money in case of subscribers to MOA because as per Section 10 of the Companies Act, 2013, the subscription money from subscribers to MOA become a debt due to the company from them.

    2. We have incorporated a company with two subscribers to MoA. In MoA they agree to subscribe shares in 1:1 ratio. But actually they wanted it to be in 9:1 ratio. My question is, can we issue share certificate in this ratio or is there any provision for changing the ratio. Also we want to have a concrete proof to convince the person with major share that he has been allotted with 90% of shares.

      1. As per Section -10(1) of the Companies Act, 2013: the memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed by the company and by each member, and contained covenants on its and his part to observe all the provisions of the memorandum and of the articles. You have to issue shares to subscriber in the ratio of 1:1 and once it is done then subsequent to it your company can either go for transfer of shares in order to make the ratio of 9:1 or your company may issue and allot fresh shares to that subscriber to make his share 90% of the paid up share capital by complying the respective provisions of Companies Act, 2013 .

  4. Hello,

    My OPC was incorporated a little less than 2 months ago when the viable product was close to completion. Since im the sole subscriber i would need to pay the complete subscription amount (1L) within the week but i have pretty much exhausted my funds in the journey thus far. The product is due for release in the coming month.

    I was wondering if there was any provision where i would be able to transfer the subscription amt to current account at a later date (say in another 3 months) without any consequences ?

    1. The subscription money should be penetrated in the Company at the earliest possible. As per Section – 2(55) of the Companies Act, 2013, the subscriber to the Memorandum of the Company who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members. As per the provisions of Section 56(4) of the Companies Act, 2013, every company shall allot shares to its subscriber within 2 months from the date of incorporation whether money received or not from the subscribers. There is no provision in the Companies Act, 2013 regarding the maximum period for bringing Subscription Money by the Subscriber to the MOA. Amount pending from subscriber shall be treated as Debt till its payment.

  5. We incorporated a subsidiary company of Foreign Company in the month of December 2016 but still the subscribed capital remains unpaid. Now the Holding Company has decided not to move forward with our current business plan and plan to wait until next year and assess the situation again. My queries are
    Does FEMA or /rules/notifications prescribed thereunder or Companies Act, 2013 provide any time period within which a new company with non-resident as first subscribers should receive share capital from such non-resident subscribers.
    Is there a way to freeze the current situation? The Company does not want to fund (paid subscribed capita) the account as we are not certain about the future.
    If we have no business activity what will happen to the registration we have completed?

  6. Dear Sir, It is really very well written.. Just I have one query regarding to the Stamp duty which we have to pay within 30 days from the date of Issuance of Certificate. I am looking for the Act/section/article, where it is specific mentioned that Stamp Duty is to be paid within 30 days of Issue of Share Certificates. Can you help me on this? I have checked almost Indian Stamp Act and also Companies Act but still I have not satisfied with correct answer. Please revert

  7. My CA has registered the company with PAN card. But not providing the MOA and AOA with dsc. Is there a way to obtain the same by urself as they are already generated.

  8. My CA has registered the company with PAN card. But not providing the MOA and AOA with dsc. Is there a way to obtain the same by urself as they are already generated.

  9. If a Subscriber to the Memorandum does not pay the subscription money. Whether the paid up share capital of the company will increase or decrease?

    1. As per section 10(2), if the member does not pay the Subscription money then company can sue that person as monies payable by any member to the company under the Memorandum or Articles shall be a debt due from him to the company. Further, paid up share capital is not affected if the subscription money is not paid by the subscriber.

  10. One of our client has been incorporated on 24/06/2015. However, they have not filed Form INC-22 intimating its registered office. Can we now file the Form w.e.f within 15 days of incorporation?

  11. Ours is an OPC private limited which was incorporated on 23.01.2017. PAN delivery took more than one month. Current account is also taking more time. Share application money had already been given as cheque to bank but bank account had not yet been opened. I have below questions:
    1. Can the subscriber to MOA can be issued share certificates now as 60 days period would expire before bank account opens?
    2. If yes should the stamp duty to be paid ?
    Thanks in anticipation..

    1. Yes, the subscribers to MOA may be issued share certificates before the bank account of the Company opens. The share certificates must be issued within 2 months from the date of incorporation of the company. The stamp duty will also be required to be paid as per the applicable rate of stamp duty.

  12. Recently we formed joint venture private limited company – Feldnew India Private Limited with Indian Resident with 33% share and Chinese guys with 67% share. After company formation, chinese guys came to know that they cannot make subscription money as an individual from their country. China will allow them to invest as a company from their end than individual. At present, in AOA and MOA, chinese guys subscribed shares for 67%. Since they are unable to send their subscription money into company as an individual, what is the solution for us? Can we take other Indian in their place? if so, what is the process? Pls advise

    1. As per the facts presented, the chinese investors have subscribed to the MOA and AOA. Once filed the subscription sheet of MOA and AOA can’t be changed. The subscriber cannot transfer this liability.
      As for the second part of your query, matter needs detailed examination. One of the alternatives may be to form entirely new company and do business in there.

  13. Dear Sir,
    I have a query.

    A pvt company is incorporated in Jan 2017 having 2 directors who are also the shareholders of the Company. Out of 2 subscribers one subscriber is not paying the subscriber amount to the Company. I Know that it become a debt due to the company from that director.

    I want to know what are the consequences if one of the subscriber is not paying the amount.

    1. The subscriber has to pay the subscribed amount because by signing MOA of the company, he/she binds himself to pay the money and he cannot transfer this liability. It is a liability he cannot escape from. As after the issuance of Certificate of Incorporation, the company has its own separate legal entity, it can sue the subscriber for realising the subscription amount.

  14. Dear Sir/ Mam

    One of the Subscriber to the MOA Deposited Whole Money In Behalf of other Subscribers

    Is It Possible??
    Can I allot Shares to others Subscriber also

    Other Query Is

    Subscriber Deposited above of Subscribed Capital

    Can I Treat it as a Loan ( Subscriber is Director Also)

    e.g Total Subscribed Share Capital is Rs 50000

    And only One Subscriber Deposited
    Rs 100000

      1. Companies Act, 2013 is silent on this point. But always recommend that subscribers to MOA should pay through banking channels. We must look in section 42 and 62 which talk about further issue of shares and in those sections there is requirement to pay the money for shares via banking channel only.

  15. Dear Sir,
    In case of rights issue, can a company allot shares first and then collect money later in a period of a week?

    Else,
    Is it possible that a company may receive a form of financial instrument before the allotment and then receive the money after the allotment through a different form of financial instrument?
    Kindly assist.
    Regards.

    1. As per Sub-section(1) of section 39 of companies Act,2013 No allotment of any securities of a company offered to the public for subscription shall be made unless the amount stated in the prospectus as the minimum amount has been subscribed and the sums payable on application for the amount so stated have been paid to and received by the company by cheque or other instrument.

  16. My bank account is taking 10 days late to open. So, if I issue the share certificates after 80 days of incorporation (instead of 60 days), will that attract heavy fine? Please answer. Thank you.
    The delay is because of delay of receiving PAN card and due to bank processing time.

    1. In our opinion, shares are deemed to be allotted to the subscribers to MOA on the date of incorporation of the company. Share certificates shall be issued within 2 months of the date of incorporation as per Section 56 of the Companies Act, 2013. Since you have issued share certificates after 80 days of incorporation, you may have to face the consequences. There is no such condition that you cannot issue share certificates without receipt of subscription money in case of subscribers to MOA because as per Section 10 of the Companies Act, 2013, the subscription money from subscribers to MOA become a debt due to the company from them.

  17. Are we allowed to issue shares to the subscribers of a memorandum and collect the money at a later date?

    Please do let me know how you have arrived at your answer as well. Any provisions or rules would be extremely helpful.

    1. In our opinion, yes, the company can issue shares to the subscribers of MOA and collect the money at a later date.
      Generally, the date of incorporation of the company is deemed to be the date of allotment of shares to subscribers to MOA. As per Section 10(2) of the Companies Act, 2013 (the “Act”), all monies payable by any member to the company under MOA shall be a debt due from him to the company and as per Section 2(55) of the Act, the subscriber to MOA shall be entered as a member in the company’s Register of Members.
      Thus, the money payable by the subscribers to MOA shall be a debt due from them and will be shown as a debt in the accounts of the company till it is paid to the Company. Date of incorporation is deemed to be the date of allotment and share certificates shall be issued within 2 months from the date of incorporation in order to comply with the provisions of Section 56 of the Act.

  18. Sir,
    As per Section 56(4) (a), a company can issue share certificates within two months of incorporation.
    Accordingly, I have passed Board resolution for issue of share certificates to the subscribers of MOA of a newly incorporated company (Its a private company incorporated on 23.08.16). I want to know whether apart from common seal, director and CS signature, do we need any other stamp or sign on the share certificate? And at what point of time do we have to pay stamp duty and what is the process of payment of stamp duty, is it online ?
    Do we need to file any forms on MCA portal regarding issue of share certificate to subscribers of MOA?

    1. According to Section 46 of the Companies Act, 2013, the Share Certificate needs to be signed either by two directors OR by a director and Company Secretary(If appointed). Also, the common seal needs to be attested only if the company has one. No other stamp or sign is required.

      According to the Indian Stamp Act, 1899, the Company shall pay the stamp duty within 30 days of issue of Share Certificates.

      The process of payment of stamp duty is online now. User may register on the website, login and further pay the stamp duty. The link of the website has been provided below:
      http://www.shcilestamp.com

      There is no need to file any forms on MCA portal for issue of share certificate. You only need to make an entry in Register of Members (MGT-1).

    1. Section 2(55) of the Companies Act, 2013 says that “member means the subscriber to the memorandum of the company who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members……….”
      As per Section 10(2) of the Companies Act, 2013, all monies payable by any member to the company under the memorandum or articles shall be a debt due from him to the company.
      Thus, if the subscriber does not bring in subscription money then it will be shown as a debt against subscriber on the asset side in the balance sheet of the company.

  19. Hello Sir, I have a query.
    Their is a co. incorporated on 09.11.2016 and the application money is recd. from one of the subscriber on 14.12.15 before expiration of 60 days and from the another on 13.02.16 after expiration of 60 days and both have been deposited in bank accounts.
    My query is what is the remedy in this regard so that penalty not attracts or else what is the remedy, can we show that the subsribers has done cash payment on time but on 13.01.16 the amount has been deposited.
    Second,after receiving application money i have to issue certificates in back date, can i allot fully paid -up share certificates as the whole amount has been recd. in the month of march-16.
    Pl. look into the matter.
    Thanks in advance.

    1. In our opinion the subscription money should be received through banking channels. We understand that nothing specific has been provided for share subscription money but then reference is to be taken from what has been provided elsewhere in the Act. As per Section 56 (4) (a), share certificates shall be issued within 2 months from the date of incorporation in case of subscribers to memorandum. You may have to issue share certificates on different dates after receipt of application money.

  20. Hello Sir, I have a query.
    Their is a co. incorporated on 09.11.2016 and the application money is recd. from one of the subscriber on 14.12.15 before expiration of 60 days and from the another on 13.02.16 after expiration of 60 days and both have been deposited in bank accounts.
    My query is what is the remedy in this regard so that penalty not attracts or else what is the remedy, can we show that the subsribers has done cash payment on time but on 13.01.16 the amount has been deposited.

    Second,after receiving application money i have to issue certificates in back date, can i allot fully paid -up share certificates as the whole amount has been recd. in the month of march-16.

    Pl. look into the matter.
    Thanks in advance.

    1. In our opinion the subscription money should be received through banking channels. We understand that nothing specific has been provided for share subscription money but then reference is to be taken from what has been provided elsewhere in the Act. As per Section 56 (4) (a), share certificates shall be issued within 2 months from the date of incorporation in case of subscribers to memorandum. You may have to issue share certificates on different dates after receipt of application money.

  21. Hey,
    I have 2 queries: –
    1. Can Subscription money be partly paid up. for eg: –
    Face Value -Rs. 10/- shares
    Rs. 2/- paidup at first board meeting and rest at later date.
    2. Is it possible, while the above subscription money is partly paid and company can has offered shares to existing shareholders, through right issue and shareholder will pay towards right issue as well as subscription money together.

    1. As per sec 179(3) of Companies Act 2013, power to call amount uncalled on share lies with BOD. BOD decide as per the company policy regarding call money on share.
      Yes, subscription money can be partly paid up, as per the provisions of section 39 of the Companies Act, 2013, but the application money cannot be less than five percent of the nominal amount of the security. Probably, suitable clause may be inserted in the Articles of the Company.

      Yes,Company can issue the shares through the process of right issue in the proportion of paid up share capital.
      There is no condition in the Companies Act, 2013 which requires the earlier shares to be fully paid up before you can make a right issue.

  22. Dear Sir,
    My company was incorporated on 24th august 2015 and the bank account was opened on 17th march 2016. Is it possible for me to issue share certificate against cheque in hand to avoid 60 days time limit?

  23. how can you say that sec 42(5) of CA 2013 is applicable to the money received by the subscribers of MOA?
    how is subscription to MOA same as private placement ?

    1. Subscription to MOA is different from the Private Placement as the latter is done after the company has been incorporated and the former is a part of the process of incorporation. Thus, Section 42 (5) is not applicable in case of subscribers of MOA. However, we do not advise our clients to bring in subscription money in cash. In the absence of any specific provisions, we do refer to other section guidamce.

  24. what happened when we do not deposit the subscription in bank account even though we are showing it in the balancesheet and also in MGT-7 and AOC-4 in case of private company

    1. As such CA doesn’t mention any thing about this except in case of private placement and preferential issue. But as per wider interpretation of section 39 of CA 2013, sums payable on application shall be received through cheque or other instrument.

  25. pas 3 and mgt 14 require to file for share allotment to first subscriber (both are direc as well as shareholder).
    plz reply with sec

  26. Whether subscribers to MOA can be allotted shares, before receiving the share money from them, it is known that (it is done only on the receipt of the share amount), but are there any exceptional circumstances?

  27. Dear Sir,
    Due to some reasons we have not able to open a bank account.
    How can we fulfill the condition of issuing share with in 60 days after incorporation.
    Can we issue shares with out receiving the subscription money.

  28. Dear Sir,

    After initial subscription, if further funds are received from existing member, then in this case how should this share application money be treated? Is there a requirement for opening a separate bank account as per provisions of Section 42? Please advise.

  29. do we need to file PAS-3 and MGT-14 for allotment and issue of shares to subscribers of MOA in private company? can I get format of Board resolution and for forms MGT-4 and MGT-5

    1. There is no need to file PAS-3 for allotment of shares to subscribers of MOAat the time of incorporation of company. However, as and when any shares are issued and allotted to them afterwards, PAS-3 and MGT-14 will have to be filed.

      1. There is no need to file PAS-3 for allotment of shares to subscribers of MOA at the time of incorporation of company…….in this regard, can you please quote the section under which the company no need to file PAS 3 with ROC for allotment of shares to subscribers of MOA …..THANKS in advance

        1. There is no provision in the Companies Act, 2013 dealing with allotment of shares to subscribers. Moreover, the main purpose behind filing PAS-3 is to intimate the ROC of the allotment being made by the company. The same purpose is served in case of promoters at the time of filing subscribers’ sheet in MOA and AOA filed at the time of incorporation. The date of issuance of Certificate of Incorporation shall be deemed to be the date of allotment of shares to subscribers.

  30. There is a company incorporated on 20/07/2014. 

    However no further transaction are carried out. Only a bank account is opened on depositing Rs 50000/- 

    Can we show cash received of Rs. 50000/ for allotment of shares to directors ? Or we have to show Rs. 50000 receivable from Directors against shares subscribed.

    Please provide your valuable suggestion

  31. we have incorporated our company in last week.so i am not aware about what are the formalities we have to complete after incorporation company.so please suggest me what are mandatory activities

    1. There are number of compliances, which are as follows:-
      • Safe custody of incorporation documents.
      • Holding of first Board meeting within maximum 30 days from date of incorporation
      • Company shall maintain a Registered office on and from 15th day of its incorporation
      • Appointment of Auditor of the company
      • Adoption of letter head for the Books, Register and other notices
      • Apply for PAN
      • Opening of Bank account in the name of company
      • Adopt rubber stamps
      • Issue of share certificates
      • Stamp Duty on issue of Shares

    1. Earlier, according to Section 11 of Companies Act, 2013 it was mandatory for every company to open a bank account within 180 days of incorporation after which it would have been granted the certificate of commencement of business. However, after the Companies Amendment Act, 2015, Section 11 has been deleted and the provision to open a bank account within a prescribed amount of time has been done away with.

  32. Within what time shall subscriber to m.o.a shall pay his subscription amount on shares to the company???

    1. According to Section 11 of the Companies Act, 2013 subscription money shall be received before 180 days from the date of incorporation as the company would be required to file Form INC-21 for commencement of business certificate with the ROC within such time.

      However, now after the passage of the Companies Amendment Act, 2015, the requirement for obtaining the certificate of commencement of business has been done away with and Form INC-21 is not required to be filed.

      1. in case of newly incorporated company… due to some reason bank account is not open within 60 days of incorporation… if company isssue share certificate after 60 days whether it would be valid? if not then what would be the further action?

        1. The company may issue share certificates after 60 days but since it has not complied with the provisions of Section 56(4) of the Companies Act, 2013, the company may have to face the penal consequences.

  33. can anybody tell me that is it necessary to have a current account for filling inc 21???
    If no is there any literature available on net for this

    1. Yes, it is necessary to open a Current Account before filing INC-21 because it is a declaration to be filed by a director that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him. And in order to pay for the securities subscribed, the company got to have a bank account. It can’t be paid in cash.

      1. Hello,

        Can you please share me provisions of the Companies Act, 2013 where it says that money of subscribers to MOA shall be taken in bank account and not in cash? I will really appreciate for your help. Thanks

        1. Sub-Section 5 of Section 42 of the Act provides that all monies payable towards subscription of securities under this section shall be paid through cheque or demand draft or other banking channels but not in cash. Also Rule 14 (2)(d) mentions that the payment to be made for subscription to securities shall be made from the bank account of the person subscribing to such securities.

          1. Is section 42 applicable to shares alloted to the promoters as subscribers against subscription to the memorandum?

          2. Subscribers to MOA are deemed shareholders of the company. As soon as they subscribe the MOA & file it with ROC along with other incorporation documents they become the members as well as shareholders of the company.

        1. Sub-Section 5 of Section 42 of the Act provides that all monies payable towards subscription of securities under this section shall be paid through cheque or demand draft or other banking channels but not in cash. Also Rule 14 (2)(d) mentions that the payment to be made for subscription to securities shall be made from the bank account of the person subscribing to such securities.

          1. Why subscribers to MOA shall be taken in bank account and not in cash?

            Dear Sir,
            The answer you given for the above,as per the provision Section 42 and Rule 14 (2)(d) aren’t these section are in reference to private placement of shares not for initial subscription by the subscriber to the memorandum.

          2. The provisions in Sec 42 are sufficient enough and very clear. In both the cases, money is being paid by the proposed allottees towards share capital of the company. We fail to understand why Subscription money be treated separately?

        1. Sub-Section 5 of Section 42 of the Act provides that all monies payable towards subscription of securities under this section shall be paid through cheque or demand draft or other banking channels but not in cash. Also Rule 14 (2)(d) mentions that the payment to be made for subscription to securities shall be made from the bank account of the person subscribing to such securities.

    1. We have incorporated a pvt. ltd. Co. in march’16 & due to some reasons, the bank account was opened in the month of Oct.’16. Now, Can the subscribers to MOA deposit cash against their share of subscription in the bank account. Plz. advice. Thanks in advance

      1. Yes, the subscribers to MOA can deposit cash against their subscription in the bank account even now after the bank account was opened. The money receivable from the subscribers to MOA towards subscription becomes a debt due from them as per Section 10 of the Companies Act, 2013. The shares are deemed to be allotted to the subscribers to MOA on the date of incorporation and the share certificates shall be issued to them within 2 months from the date of incorporation.

  34. Sir, Do we need to file any form before increasing the authorised capital to show that previous sum ie subscribers to memorandum have been given their shares. ?

    1. Filing of Form SH-7 (Notice to registrar of any alteration of share capital) along with prescribed free with registrar is required to be filed within 30 days of passing the resolution in line with provisions of Section 64(1) of the Companies Act 2013 and Rule 15 of Companies (Share Capital & Debentures) Rules, 2014.

      No, other Form is required to filed before increasing the authorised capital to show that previous subscribers to memorandum have been given their shares.

    1. Dear Chaitanya,
      As per my understanding in the first board meeting, all the director needs to disclose their interest in other entities and for this purpose only MGT-14 will be filed within 30 days of meeting.( We are assuming that in the first B.M. you will not require any fund or grant loan to/from any other entity/person).

  35. Sir,we have incorporated a private limited company. can we open the company bank account in a urban co-oprative bank which is not scheduled ?

    1. Companies Act is silent as to the operations of the company with respect to bank accounts. However, for certain specified activities like receipt of share application money under private placement process, etc., Companies Act, 2013 specifies the use of scheduled banks for keeping the application money.

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    1. Dear All,
      Does FEMA or /rules/notifications prescribed thereunder or Companies Act, 2013 provide any time period within which a new company with non-resident as first subscribers should receive share capital from such non-resident subscribers i.e. for example: the share capital is to be received within say 90 days of certificate of incorporation, etc?
      Thanks
      Sia

      1. Dear Sia,

        There is no such requirement in FEMA. However, as per Sec 11 of CA 2013, even a Pvt Ltd company has to obtain a Cert of Commencement of Business. And for that it has to file INC 21 where the Director of the Company has to make a declaration to the effect that subscribers have paid for the shares subscribed by them. However, pl note that there is no time line prescribed for the same. But till Cert of COB is obtained, company can not commence its business.

        bsamrish

  38. I do agree with all of the ideas you have introduced in your post. They’re really convincing and can definitely work. Still, the posts are too short for starters. May you please prolong them a bit from subsequent time? Thank you for the post.

  39. It was really an informative article. Well written. I’ve also heard from my references that your Company offers company incorporation services and corporate legal services in Delhi. Nice to see you sharing your experience for all of us.

  40. Very informative and in-depth analysis in-deed. Waiting to read your next article. I suggest to write some articles on the post incorporation compliances, compliances before and after issue of shares, etc. That would be really helpful to the students preparing for the company secretary examinations.

  41. I was looking for an article on post incorporation compliances and found yours as an informative one. I have decided to bookmark your blog and keep watching for future articles. Thank you.

  42. It was well-written and contained sound, practical advice. The professionals will be benefitted by your article on ‘post incorporation compliances’. You pointed out several things that I will remember for years to come. I look forward to reading your next informative work.

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