🏛️This blog breaks down the most important limits and timelines under the Companies Act, 2013. Whether you're a CS, CA, or law student—or just someone dealing with company compliance—this is your cheat sheet!
🔹 Company Types and Definitions
| Type of Company / Concept | Key Limit / Rule |
|---|---|
| Illegal Association | Max 50 members if not registered. |
| Private Company | Max 200 members. |
| Small Company | Paid-up capital ≤ ₹4 Cr and Turnover ≤ ₹40 Cr. |
| Associate Company | Has ≥ 20% of the total voting power in another. |
| Subsidiary Company | Holds > 50% of total voting power. Can have a max of 2 layers. |
| Government Company | The government holds ≥ 51% of the share capital. |
| One Person Company (OPC) | Only 1 member allowed. Cannot be a member of more than 1 OPC. Must be a resident (≥ 120 days stay in India). |
📄 Important Filings and Timelines
| Section | Compliance | Time Limit |
|---|---|---|
| Sec. 10a | Declaration of subscription money received | Within 180 days of incorporation |
| Sec. 12 | Verify the registered office | Within 30 days of incorporation |
| Sec. 14 | File changes in Articles (AOA) | Within 15 days of passing the resolution |
| Sec. 16 | Change name (by order) | Within 3 months |
| Sec. 26 | Issue prospectus | Within 90 days of filing with the ROC |
| Sec. 42 | Allot private placement shares | Within 60 days, a refund in 15 days if the request fails. |
| Sec. 56 | Issue share certificates | 2 months for shares, 6 months for debentures |
| Sec. 62 | Rights issue open period | 7 to 30 days (3 days prior dispatch of the offer) |
🧾 Shares and Dividends
| Compliance | Limit |
|---|---|
| Sweat Equity | Max 15% of existing equity or ₹5 Cr/year, max 25% overall. For startups: 50% allowed up to 10 years. |
| Buy-back of shares | Max 25% of paid-up equity + free reserves. Destroy within 7 days. |
| Dividend declaration | Must deposit in a separate bank A/C within 5 days of declaration. |
| Unclaimed dividend | Transfer to Unclaimed Dividend A/C in 7 days; to IEPF in 7 years. |
| Interim dividend (if loss) | Can't exceed an average of the past 3 years. |
💰 Deposits & Loans
| Compliance | Limit |
|---|---|
| Deposit repayment reserve | 20% of deposits to be kept in reserve by 30 April. |
| Loan for buying company shares (public company) | Max 6 months’ salary for employees (not for directors/KMP). |
📋 Meetings & Resolutions
| Compliance | Rule |
|---|---|
| First AGM | Within 9 months of the FY end. |
| Subsequent AGMs | Within 6 months of FY end, not more than 15 months apart. |
| EGM (on requisition) | The board must act within 21 days; an EGM must be held within 45 days. |
| Quorum (Public Co.) | 5 members for ≤1,000, 15 for 1,001–5,000, 30 for >5,000. |
| Proxy form | Submit 48 hours before the meeting. |
| E-voting | Mandatory for listed or Co. with ≥1,000 members. |
📊 Registers, Records, & Returns
| Record | Duration |
|---|---|
| Books of account | Preserve for 8 years. |
| Register of members | Permanently. |
| Annual return | File within 60 days of the AGM. OPC: within 180 days from FY end. |
| Minutes of meetings | Prepare within 30 days of the meeting. |
🔍 Auditors & Audit
| Compliance | Rule |
|---|---|
| Auditor Appointment | For 5 years (till 6th AGM). Rotation after 1 term (individual) / 2 terms (firm). |
| Disqualification | Auditor/relatives cannot hold securities > ₹1 lakh or loans> ₹5 lakh in the company. |
| Fraud Reporting | < ₹1 Cr → inform board; ≥ ₹1 Cr → inform CG. |
| Cost Audit | If turnover & specified services cross thresholds (₹50/100 Cr). Report in 180 days. |
🌐 CSR (Corporate Social Responsibility)
| Compliance | Rule |
|---|---|
| Applicability | If Net Worth ≥ ₹500 Cr, Turnover ≥ ₹1,000 Cr, or Net Profit ≥ ₹5 Cr. |
| CSR Spend | Min 2% of the average net profits of the last 3 FYS. |
| Unspent amount | Transfer to fund within 6 months (or CSR A/C in 30 days for ongoing projects). |
| Impact Assessment | Mandatory if avg CSR ≥ ₹10 Cr in the last 3 years. |
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