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Date on which first balance sheet to be prepared for newly incorporated company?

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If a company has been incorporated on 24th February 2014, then what are the legal compliance for instances, holding AGMs, Board Meetings, etc. Further, as on which date the Company shall prepare its first financial statement?

posted Jun 13 by Anurag Kashyap

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1 Answer

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Key provisions regarding holding AGM:
1. AGM should be held once every year.
*2. First AGM of the co. should be held within 9 months from closing of first financial year. Hence it is not necessary for a co. to hold any AGM in the year of its incorporation.*
3. Subsequent AGM shall be held within a period of 6 months from the closure of Financial Year.
4. The gap between 2 AGMs shall not exceed 15 months.
Hence, in given case, the company can hold its first AGM upto 31st December 2015(i.e. 9 months from end of its first financial year-provisions regarding first financial year has been mentioned in the following points of the answer). There are some extension provisions as well, but the same are not allowed in case of first AGM.

Provisions regarding Board Meeting:
1.A co. must hold its first Board Meeting (BM) within 30 days of its incorporation.
2. Subsequently, every co. must hold 4 MBs in a year (C.A. '13 consider 1st jan- 31st Dec as a yr. in case of BMs).
3. Max. gap cannot exceed 120 days between 2 BMs.
4. C.A.2013 has also laid down that BMs can validly be held by way of Video Conferencing.
5. At least 7 days notice is required (a shorter notice is also valid under certain circumstances ).

Provision regarding first Financial Statement:
As per the provisions of Companies Act 2013, it clearly states that where a company has been* incorporated after the 1st day January of any year, the period ending on the 31st day of March of the following year shall be the first accounting year* in respect whereof the financial statement of a company or body corporate is made up.
Hence in the given case, the company is required to prepare its first financial statement on 31st March,2015.

answer Jun 13 by Amrita
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