Key Compliance Requirements for Public Limited Company in India: CS Needs to know

Public limited companies in India are governed by a comprehensive legal and regulatory framework led by the Companies Act, 2013. They are also subject to compliance obligations under the Foreign Exchange Management Act (FEMA), Goods and Services Tax (GST) Act, 2017, Income Tax Act, 1961, and various labour laws. Company secretaries (CS) play an important role in ensuring that public limited companies remain compliant, especially in light of recent legislative updates and evolving procedural norms.

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This article explores the core compliance requirements at various stages of a company’s lifecycle from incorporation to ongoing financial, statutory, and regulatory filings, with practical insights tailored for CS professionals.

1. Incorporation and Initial Compliance

At the formation stage, compliance begins with fulfilling requirements under the Companies Act, 2013:

• Minimum Requirements: A public company must have at least 7 members and 3 directors (no maximum limit on members), as per Section 3.
• Name Reservation: The name must end with "Limited" and not resemble existing entities. Form INC-1 (via SPICe+) is used for name reservation under Rule 8.
• MoA & AoA: The Memorandum of Association must specify the company’s name, registered office state, objects, and liability clause. The Articles govern internal management.
• Registered Office: Proof must be filed via Form INC-22 within 30 days if not submitted during incorporation (Section 12).
• DIN Allotment: Directors must obtain a Director Identification Number through Form DIR-3.
• Certificate of Incorporation: Issued via Form INC-11, with a unique Corporate Identity Number (CIN).
• Display Requirements: Registered name, office address, CIN, and contact details must appear on all official communication (Section 12(3)).
• False Information Penalty: Misstatements attract action under Section 447 and could lead to management intervention, name removal, or winding up.

2. Capital and Securities Compliance

Capital structure compliance remains key, especially in fundraising:

• Differential Voting Rights (DVRs): Permitted if authorized by articles, subject to a special resolution, with restrictions on issue size and past defaults (Section 43, Rule 4).
• Sweat Equity Shares: Allowed under Section 54 for directors or employees who have worked for at least a year; capped at 25% of paid-up capital.
• Debentures: Non-convertible debentures require creation of a Debenture Redemption Reserve and investments under Rule 18(7).
• Preferential Allotment: Requires special resolution, price valuation report, and compliance with SEBI guidelines (listed companies), filed in Form PAS-3.

3. Key Managerial Personnel (KMP) and Board Committees

Companies meeting certain thresholds must appoint KMP and set up board-level committees:

• KMP Appointment: Required if paid-up capital is Rs. 10 crore or more or turnover exceeds Rs. 100 crore. Must include MD/CEO, CFO, and whole-time CS (Section 203).
• Board Committees:
• Audit Committee: Mandatory for listed companies or those with paid-up capital of Rs. 10 crore+ (Section 177).
• Nomination & Remuneration Committee: Same criteria as above (Section 178).
• CSR Committee: Required if net worth ≥ Rs. 500 crore, turnover ≥ Rs. 1,000 crore, or net profit ≥ Rs. 5 crore (Section 135). Must file Form CSR-2 and spend at least 2% of average profits on CSR.

4. Meetings and Governance

Public companies must ensure proper governance through periodic meetings:

• Board Meetings: At least four per year, with no more than 120 days between any two (Section 173). The first meeting must occur within 30 days of incorporation.
• Annual General Meeting (AGM): Held within 9 months of the first financial year end and within 6 months in subsequent years (Section 96).
• Extraordinary General Meetings (EGM): Can be called as needed. Resolutions passed must be filed in Form MGT-14 (Section 117).
• Minutes and Records: Maintain separate Minute Books as per SS-1 and SS-2; proper documentation is vital for legal validity.

5. Financial Reporting and Audit Compliance

Adherence to financial disclosure and audit requirements ensures transparency:

• Financial Statements: Prepared per Ind AS if net worth ≥ Rs. 500 crore or turnover ≥ Rs. 1,000 crore. Filed via Form AOC-4 within 30 days of AGM (Section 129).
• Statutory Audit: Auditor appointed for 5 years, with rotation mandated for certain entities (Section 139).
• Cost Audit: Applicable to specified sectors based on turnover; filings made in XBRL format (Section 148).
• Secretarial Audit: Mandatory for listed companies and public companies with paid-up capital ≥ Rs. 50 crore or turnover ≥ Rs. 250 crore. Report filed in Form MR-3 (Section 204).
• Annual Return: Form MGT-7 to be filed within 60 days of AGM, disclosing shareholding and directorship details (Section 92).

6. Other Regulatory and Statutory Filings

Public companies must also comply with other financial and tax laws:

• FEMA Compliance: FC-GPR filing required within 30 days of allotment to foreign investors; annual return on foreign liabilities via RBI's FLAIR portal by July 15.
• GST Filing: GST registration if turnover exceeds Rs. 40 lakh (Rs. 20 lakh for special states). Monthly/quarterly GSTR-3B and GSTR-1 compliance required.
• Income Tax Filing: Advance tax must be paid in four instalments; ITR due by September 30 (or November 30 if audit required).
• Labour Laws: ESI and PF registrations (based on employee strength), minimum wage compliance, gratuity payments, etc.

7. Recent Updates

• Dematerialization Deadline: Extended to June 30, 2025, for private companies; may soon apply to unlisted public companies.
• Amendments to Ind AS: Companies (Indian Accounting Standards) Amendment Rules, 2025, affect financial reporting norms. Read Full Explanation
• Expiry of COVID-19 Relaxations: Earlier MCA relaxations have mostly ended; real-time compliance is now expected.

8. Role of the Company Secretary

The Company Secretary plays a central role in:

• Advising the board on legal compliance.
• Filing forms on the MCA21 portal (e.g., INC-22, MGT-7, PAS-3).
• Maintaining statutory registers (e.g., MGT-1, SH-6).
• Organizing meetings, drafting agendas, and recording minutes.
• Coordinating with auditors and managing compounding or penalty matters.

9. Practical Implications and Penalties

Non-compliance can result in heavy penalties:

• Failure to hold AGM: Penalty of Rs. 1,00,000 on the company and Rs. 1,000 per day on defaulting officers.
• Late filings: Attract additional fees and adjudication before the Regional Director or NCLT.

Summary Tables

Table 1: Key Annual Compliance Deadlines

Compliance	Form	Due Date
Financial Statement	AOC-4	Within 30 days of AGM
Annual Return	MGT-7	Within 60 days of AGM
Return of Deposits	DPT-3	June 30 annually
MSME Return	MSME-1	April 30 / October 31
Director KYC	DIR-3 KYC	September 30 (next FY)

Table 2: Key Event-Based Compliance Deadlines

Compliance	Form	Due Date
Share Allotment	PAS-3	Within 30 days of allotment
Appointment/Resignation	DIR-12	Within 30 days of change
Creation of Charges	CHG-1	Within 30 days of creation
SBO Declaration Return	BEN-2	Within 30 days of BEN-1 receipt

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