Immediately after incorporation of the company, there are certain post incorporation matters that need attention of the directors.
Following are some of the important processes to be initiated post incorporation. While many of the following requirements are mandatory as per law, some (such as bank account opening) are advisable for a company to be able to do business.
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Holding first Board Meeting
It is required to hold the first board meeting within 30 days of company formation. Certain important business matters are to be taken up
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Disclosure of Directors Interest
At the first board meeting of the Company, the directors need to disclose their business interests in other entities as promoter / director / partner etc.
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Auditor appointment
The first auditor of the company is appointed by the directors in the first board meeting. The auditor holds office until the next Annual General Meeting. Form ADT-1 needs to be filed for intimation within 15 days of auditor appointment.
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Printing of share certificates
Share certificates should be printed and issued to the subscribers as soon as possible, but not later than the time prescribed under the Companies Act
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Payment of stamp duty
The share certificates issued must be stamped according to the stamp duty act of the state in which registered office is situated. The process may vary from state to state and be online or offline. Many startups ignore to comply with this step.
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INC 20-A for Certificate of commencement of business
As per recent amendments to the Companies Act, every company is now required to obtain a certificate for commencement of business before commencing its business. The company is required to file a Form INC 20-A to obtain this certificate.
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Opening of bank account
The company should open a bank account as soon as possible after its incorporation for the following reasons:
- Receiving share capital money
- Collecting revenues
- Making payments for expenses / to suppliers
- Bank account is also required for further registrations such as GST / IEC Code etc.
To open a bank account the company should pass a resolution in a meeting of the Board of Directors. As most banks have their own specific formats required, it is advised that the bank and the resolution required should be passed in the first board meeting itself, so as to save the process of calling another board meeting for the same.