Compliance requirements for a Company
The management of a
company is vested with the Board of Directors. The Board of Directors manages
the day to day affairs of the company subject to the provisions of the
Companies Act and as per the Memorandum and Articles of Association. The
decisions at the meeting of directors are carried by way of resolutions. There
are certain decisions that require the approval of shareholders by way of a
resolution.
The compliance process in a company is ensured by
way of meetings of directors and shareholders, maintenance of Minutes,
Registers and Records, appointment of company secretary, maintenance of
accounts and audit and filing of periodic and event based returns to Registrar
of Companies and other regulatory authorities.
Board of Directors and Meetings
Directors are appointed by shareholders and the
day to day management of company is vested with the Board of Directors. The
Board carry out the management through decisions taken at their meetings. The decisions at the
meeting of directors are carried by way of resolutions. The Board of Directors
has to meet at least once in every three months and at least 4 meetings shall
be held in every year. Minutes of Board Meeting should be recorded and kept
signed by the Chairman of the meetings. Though the day to day affairs are
managed by the board of directors, there is certain decision that requires the
approval of Shareholders meetings.
Shareholders and Meetings
Shareholders are the
ultimate owners of the company and thus they are the ultimate decision making
authority for matters such as appointment of directors etc. Every year, the
company has to convene an Annual General Meeting (AGM) of the shareholders for
adopting the Annual Accounts and appointment of Auditors for the following
year. Any meetings of shareholders other than the Annual General Meeting are
called Extra Ordinary General Meetings (EGM). Minutes of General Meetings of
the company should also be recorded and kept signed by the Chairman of the
meetings.
Company Secretary
Every company having a
paid up capital of Rs.5 Crore or more shall appoint a whole time Company
Secretary and every company having a paid-up share capital of Rs.10.00 Lakhs to
Rs.5.00 Crores shall obtain the Secretarial Compliance Certificate from a Company
Secretary in whole-time practice and have to file the same with the Registrar
of Companies.
Minutes / Registers / Records and
Common Seal
A company is required to maintain and preserve a set of records as
required under Companies Act as follows:
1.
Statutory Registers
such as Register of Members, Register of Directors, Register of Directors
Shareholding, Register of Charges etc.
2.
Share Certificate
3.
Minutes Book
4.
Common Seal
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