An Overview of Public Company Annual Compliance

Annual Compliance is required for Public Companies that are needed to be carried out in accordance with the regulations provided by the Registrar of Companies along with the Ministry of Corporate Affairs.

Section 2 (71) of the Companies Act, 2013, defines a public company which states the company should mandatorily consist of a minimum of seven members with no maximum limit for members or shareholders. The Shares of a Public Company can be attained by any person by initiating public offerings or by trading in the stock market.

Section 2 (52) of the Companies Act, 2013 defines a Listed Company, which states that any company that has Shares on the Stock Exchange is a listed company. A person who owns the Shares is known as a Shareholder. Therefore, by default, the Shareholders are required to subscribe to the Shares of the Public Company.

The Regulatory Authority for the maintenance of a Public Company Annual Compliance is authorised under the Ministry of Corporate Affairs and the Registrar of Companies.

Advantages of Public Company Annual Compliance

The following reasons mentioned below are the annual compliance measures that are needed to be maintained in accordance with the regulatory requirements for the company -

• Reputation -
• By following the compliance measures, the Public Company maintains a reputable image and builds trust in the eye of the public. This also builds trust with investors that motivates them for investing in the Public Company.
• Compliance -
• By maintaining the annual compliance measures within the prescribed time duration, the Public Company fulfils their legal obligations.
• A reduced amount of Burdens -
• By fulfilling the Annual compliance measures. If not followed timely, the Annual Compliance measures can be quite detrimental to the reputation of the company, and a lot of the company's time would be invested in complying with the legal accusations that are mandatory to be fulfilled.

Annual Return Compliance for Public Companies

The following criteria mentioned below are the Annual Return Compliance that is mandated to be maintained for all Public Companies in India -

• The Compliance of the Audited Balance Sheet of the Company, along with other specified accounting details, which is to be done within thirty days from the date of each Annual General Meeting, which is also known as AGM.
• The Compliance of the Audited Profit and Loss Account, which is to be followed in accordance with the Ministry of Corporate Affairs and the Registrar of Companies.
• The Compliance Certification of the Company Secretary, who is also known as the CS, is mandatory when a Public Company secures the paid-up capital of a minimum of ten crores or has a turnover of a minimum of fifty crores.
• The Compliance of confirming the Registered Office location that is to be done within thirty days from the date of the Public Company's incorporation.
• The Compliance of Registration of all the members in accordance with the Companies Act, 2013.
• The Compliance of Shares and Debenture Details to be maintained in Form number MGT - 2.
• The Compliance of Debt details to be maintained by the creditors.
• The Compliance for maintenance of the management of the Company, such as the directors disclosing their interests, is required to be conducted annually, filing of KYC by the Directors under the Registrar of the Company.
• The Compliance of maintaining the Current Shareholding Structure of the Public Company along with the changes made, which are required to be disclosed by the Directors at each Board Meeting.
• The Compliance of notifying the changes in the Directorship, which is to be immediately reported to the Stakeholders of the Public Company and has to be in accordance with Section 168 and Section 169 of the Companies Act, 2013.
• The Compliance of the Transfer of Securities and the Shares in the Financial Year is to be maintained in accordance with Section 88 of the Companies Act, 2013.
• The Compliance of the maintenance of the Registers in accordance with the requirements of the authority for the Annual General Meeting, also known as AGM, Members, Securities, and other Registers.

Compliance Measures for AGMs and Auditors

The following criteria mentioned below are the Annual Compliance Measures for Auditor and Annual General Meeting of the company that is mandated to be maintained for all Public Companies in India -

The Compliance Measures for the Appointment of Auditors

The requirements of the compliance measures for the appointment of the auditors are to be maintained in accordance with the Registrar of Companies. The Auditors are to be appointed by the Board after thirty days from the date of incorporation of the Public Company. The Compliance is needed to be filed in Form ADT - 1. If the Board fails to comply, then it is the responsibility of the members of the Public Company to commence the Appointment of the Auditor within ninety days.

The Compliance Measures for Holding Annual General Meetings

It is mandatory for the Public Company to comply with holding an Annual General Meeting, which is also known as AGM, for each year, where the first Annual General Meeting of the Public Company is required to be held within nine months from the Closing Financial Year. It is also mandatory to issue a Notice for the commencement of the Annual General Meeting for all the members of the Company.

Documents Needed for the Annual Filing of a Public Company

The following documents are required for the Compliance with the Annual Filing of a Public Company -

• The Certificate of Incorporation of the Public Company
• The PAN Card of the Applicant
• The Financial Statements of the Public Company
• An Independent Auditor needed to be appointed that is required to Audit the Financial Statements
• The Audit Report and the Board Report of the Public Company
• The Report of the Concerned Independent Auditor and the Board Report
• The Digital Signature Certificates, which is also known as the DSC the, of all the active Directors of the Public Company that must be accurate

Procedure for Public Company Annual Compliance

The procedure for the maintenance of the Public Company Annual Compliance is quite simplified. The Public Company needs to fill out the application along with the submission of all the required documentation. An Audit is to be conducted by an independent auditor where all the documents are to be evaluated, and in case of any fraudulent activities determined, legal actions are to be immediately taken. Therefore, it is quite essential for the Public Company's benefit to maintain measures for the Public Company Annual Compliance.