If you ignore small compliances, investors may ignore you


If you ignore small compliances, investors may ignore you

Startups and funding, moves simultaneously. With the growth of startups, rounds of funding also increase. Then what shall be the probable reason that generally startups could not make rounds of funding.due diligence

 

Startups search for funding but they forget to prepare themselves for the same. You are right, we here are talking about due diligence. It refers to care a reasonable person should take before entering into an agreement or a transaction with another party.

 

Almost every startup thinks of Annual Compliances to be duly complied but what they forget is about Secretarial Compliances. Such compliance are mandatory and also help in easy arrangement of funds. Not only this, it will increase the internal control of the company which is very important for long and smooth running of business.

If you ignore small compliances, investors may ignore you !!! So, we here, provide you few basics just for your ready reference, if taken care of will fulfill the need of secretarial compliance and due diligence:

 

  1. BOARD MEETINGS

  • First Board meeting should be held within thirty days of the date of incorporation.

 

  • Minimum of four Board meetings every year and not more one hundred and twenty days shall intervene between two consecutive Board meetings.

 

  • In case of One Person Company (OPC), small company and dormant company, at least one Board meeting should be conducted in each half of the calendar year and the gap between two meetings should not be less than Ninety days.

 

  • Not less than seven days notice in writing shall be given to every director at the registered address as available with the company. The notice can be given by hand delivery or by post or by electronic means.

 

  1. REGISTERS

Every company shall maintain few registers and documents to comply the provisions of the Act:

 

  • MOA & AOA: Company shall preserve permanently at its registered office MOA & AOA of filed with ROC, duly Updated from time to time. Company on request of member shall send a copy of MOA and AOA within 7 days and on payment of such fees.

 

  • Record of Private Placement: shall maintain complete Record of Private Placement under PAS-5.

 

  • Register of Renewed And Duplicate Share Certificate: This register shall be maintained recording the names of the persons, number and date of issue of the share certificate and make necessary changes indicated in the Register of Members.

 

  • Register of Members: Every Company Limited by shares shall maintain registers of members.

 

  • Minutes of Meetings: A distinctive Minute Book shall be maintained for each type of Meeting:
  •       General Meeting of Members OR Creditors
  •       Any other meeting

 

Entry in the Minute Book shall be made within 30 days from the conclusion of the                meeting. Each page of Book shall be initialed and last page of Book shall be dated and            signed.

  • Register of Sweat Equity Shares
  • Register of Transfer & Transmission
  • Register of Employee Stock Option
  • Register of Security Buy Back
  • Register of Deposits
  • Register of Charge

 

PLACE OF KEEPING REGISTERS:

  • Registered office of the company
  • If any other place then pass Special Resolution in General Meeting.

  1. CERTIFICATE OF SHARES

  • Issued in pursuance of Board Resolution
  • Shall be in Form No. SH.1
  • Issued under the seal of the company
  • The particulars of every share certificate issued shall be entered in the Register of Members

 

These are the basics which every company shall maintain from the very first day. In addition to statutory compliances, these shall help in due diligence process. Though above compliances seems small but it can help you in achieving big deals.

For secretarial and other compliance, write to us at info@taxmantra.com or visit us at taxmantra.com

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