Compliancy under the Companies Act: A Handbook for Your Company

At “AK Legal Mantra”, we navigate businesses through the maze of legal compliance so that your business is well in tune with the “Companies Act” and other relevant legislations. Whether you are a new company or an existing one, it is essential that you are aware of and adhere to the legal compliance requirements to avert risks and penalties and ensure smooth business operations.

What is the Companies Act?

The “Companies Act” is the governing law of companies in India (or any other country where there is a corresponding act). It lays down the complete legal framework for the incorporation, running, and winding-up of companies. The Companies Act lays down the framework of governance, financial statement requirements, shareholder rights, and regulatory requirements. Compliance with the Act cannot be avoided for companies of any size.

Key Areas of Legal Compliance Under the Companies Act

  • Company Structure and Registration

    ‘ The Companies Act mandates that all companies be registered with the relevant authorities, which include the “Registrar of Companies (RoC)”. A part of this registration is the submission of documents like the “Memorandum of Association (MOA)” and “Articles of Association (AOA)”, which specify the purpose of the company and the rules of its internal management.
    ” In addition, businesses also need to choose an appropriate structure (one-person company, private, or public) as per their needs and legislation.

    Board Meetings and Governance

    ‘ The “Companies Act” requires a company to hold “Board of Directors” meetings from time to time and maintain proper records of decisions made. The meetings are to be minuted and minutes are to be signed and recorded by the chairman.
    These firms should also be directed to appoint directors, company secretaries, and other key personnel as per the governance guidelines laid down under the Act.

    3. “Filing of Annual Returns and Financial Statements”

    ‘ All companies are required to deliver annual returns to the Registrar of Companies. This is achieved by presenting “accounts”, i.e., the balance sheet and profit and loss accounts, which are signed by the company directors and the auditors.
    Noncompliance with deadlines for the filing of these returns will incur penalties and prosecution.

    4. “Audits and Financial Transparency”

    The Companies Act requires every company to be audited by a qualified auditor once a year to render the financial reporting transparent. The companies are also required to keep accounting records properly and submit them to the auditor at the right time.
     The auditor’s report is a significant component of the annual filing process.

    5. “Shareholder Rights and Meetings”

    ‘The “Companies Act” establishes the shareholders’ rights, such as voting rights, payment of dividends, and right to attend AGMs. It also establishes the process of convening and holding “AGMs”, which must be held within sanctioned time frames to enable shareholder participation.
    Changes in shareholding or significant company decisions, such as mergers and acquisitions, should be approved by shareholders.

    6. “Compliance with Other Regulations”

     Besides the Companies Act, there are other statutory legislation that companies have to comply with, such as taxation law (Income Tax Act), labor law, and environmental protection law. Non-compliance with such legislations incurs severe penalties, e.g., fine or penalty, or even revocation of the company registration.

Why Compliance Matters

Compliance with the law under the **Companies Act** not only places your company within the law, but it also assists in building trust with regulators, customers, and investors. Non-compliance can lead to fines, loss of reputation, or even litigation against your company.

How AK Legal Mantra Can Help

At “AK Legal Mantra”, we have experience in guiding companies through the maze of “Companies Act” compliances. Our experienced professionals offer services such as:

  •  “Company formation and registration”
  •  “Preparation and submission of statutory document”
  •  “Corporate governance advice”
  •  “Preparation and submission of financial statements”
  •  “Shareholder and board meeting management”
  • “Audit and compliance support”

With our expertise, you can be sure your business is fully compliant with all the regulations so you can focus on growth and success.

“Ready to be in full legal compliance?” Contact AK Legal Mantra today to receive professional advice and guidance in dealing with the Companies Act!

Audit and compliance support

With our expertise, you can be sure your business is fully compliant with all the regulations so you can focus on growth and success.

Conclusion

Litigation isn’t the only way to solve disputes. With ADR methods like arbitration and mediation, you can settle matters privately, respectfully, and efficiently. AK Legal Mantra is your trusted partner in making this happen — offering smart, legal, and peaceful solutions that save your time, money, and sanity. When justice matters, but speed and peace matter too, ADR is the way to go.

FAQs

1. What happens if a company does not comply with the Companies Act?
Non-compliance with the Companies Act can lead to penalties, fines, suspension of business activities, or even the dissolution of the company.

2. How often do I need to file documents with the Registrar of Companies?
Companies must file annual returns and financial statements with the Registrar of Companies every year, within the prescribed deadlines.

3. Is an audit mandatory for all companies?
Yes, under the Companies Act, all companies, except for certain exemptions, are required to have their financial records audited by a qualified auditor.

4. How can AK Legal Mantra help with compliance?
We provide end-to-end services, from company registration to annual filings and compliance advisory, ensuring your business adheres to all statutory requirements.