Company compliance is an important aspect that has to be taken into account while running a business. It is mandatory to adhere to all the ROC compliance to avoid penalties. All private limited companies, one-person companies, limited companies, and section 8 companies must maintain annual compliance with respect to the Companies Act of 2013. These company compliances are usually independent of the total turnover or the capital amount involved. The ROC compliance for registered private limited companies is mandatory. Not being able to adhere to the annual compliances for private limited companies may result in serious action on the firm.
In reality, it is tough to maintain all the annual compliances for private limited companies. That is why Abhinav Suresh Advocate CA is here to help with the annual filings of companies and provide information regarding company compliances
Similar to other businesses, the annual compliance of private limited companies should be taken seriously. All the company compliances should be filed on or before the due date. Here are some of the private limited company compliances that you should not miss.
1. Business Commencement Certificate
As a part of the annual compliance for private limited companies, it is mandatory to have a business commencement certificate within 180 days of company incorporation. This applies to companies registered after November 2019 and having a share capital.
Penalty for not following this annual compliance: If you fail to procure the certificate of commencement, the company will be subjected to a penalty of ₹50000 and the director should pay ₹1000 for each default day.
2. Appointing an Auditor
Within 30 days of incorporation, an auditor must be appointed as per the ROC compliance. The annual filing of a company should include all of this information.
Penalty for not following this annual compliance: Breaching this private limited company compliance results in a fine of ₹300 per month. Subsequently, the company will not be allowed to conduct business until they appoint an auditor.
3. Filing ITR returns
For private limited companies, this annual compliance is crucial. Every year the income tax returns have to be filed on or before the due date.
4. Submitting MCA Form AOC-4
Private limited companies must submit form AOC 4 to the MCA to adhere to the annual compliance. This has to be completed on or before 13 November.
Penalty for not following this annual compliance: Failure to file this form will result in a penalty of ₹200 per day of default.
5. Filing MCA Form MGT-7
Private limited companies must submit form AOC 4 to the MCA to adhere to the annual compliance. This has to be completed on or before 13 November.
Penalty for not following this annual compliance: Failure to file this form will result in a penalty of ₹200 per day of default.
6. Filing for DINeKYC.
As per the ROC compliance, every private limited company should have a director. To perform all the tasks without difficulty, a Director Identification Number (DIN) is required. The director of the company should file DIN eKYC within the speculated period.
7. Hold Annual General Meetings (AGM)
This is crucial for annual compliance for private limited companies. During the annual filing of companies, all information about the AGM should be provided. It is required to hold an AGM within six months of the end of the fiscal year by ROC compliance.
8. Directors Report
Private company compliance involves providing director reports on time with the ROC and MCA. All the information should be submitted without fail as per Section 134.
Apart from the above mentioned company compliances the following should also be completed from time to time.
GST returns, monthly, quarterly, and annual
Periodic TDS Return Filing
Calculation of the tax liability in advance
Income tax return filing
Report of tax audit filed
Submitting semi-annual easy returns
Submitting PF returns
Professional tax return filing
Regulation evaluation and reporting by various laws (Eg. Environment and Protection Act, Competition Act, Factory Act, etc.)
Accounting
After each fiscal year, all businesses are required to maintain accounts and prepare financial statements. Our compliance manager will assist your company with account maintenance and will create your company’s financial statement at the end of the fiscal year.
Services for Secretaries
Each financial year, businesses must hold a minimum of four board meetings, an annual general meeting, a director’s report, and an annual report. You will receive assistance from our compliance manager in creating all secretarial reports and board meeting minutes.
Filing of MCA Annual Return
The annual general meeting of a company shall be held within six months after the end of the fiscal year. An MCA annual return must also be submitted by 30 September at the latest. The MCA annual return for your business will be prepared and filed by our compliance manager.
Filing Income Tax Returns
Regardless of income, profit, or loss, a company must file an income tax return. As a result, even inactive businesses that have no transactions must file an income tax return each year. All the paperwork will be created by our compliance manager, along with the income tax return for your business.
Compliance is defined as “the action of complying with a command” or “the state of meeting rules or standards.” It is defined in the business world as the process of ensuring that your company and its employees comply with all applicable laws, regulations, standards, and ethical practices.
Internal policies and procedures, as well as federal and state laws, are all covered by corporate compliance. Enforcing business compliance assists your company in preventing and detecting rule violations, which protects your organisation from fines and lawsuits.
The process of company complaince should be ongoing. Many organisations establish a programme to govern their company compliance policies in a consistent and accurate manner over time.
Budgeting
It assists organisations in efficiently controlling the company’s income and expenditure while monitoring managerial policies and goals.
Managing Cash Flow
Keeping track of the money that comes into the business on a regular basis helps in projecting patterns, paying employees and suppliers, repaying debts, etc.
Evaluating the Business’s Performance
Helps in measuring the performance of the business in terms of key measures such as net profit, sales growth, and so on.
Financial Information to Investors and Stakeholders
Investors will gain a better understanding of the business’s financial health, including its solvency, creditworthiness, liquidity, stock, and bond issuers.
Mandatory by Law
In India, the Registrar of Companies requires a strict record of income tax payments at the end of the year, failing which companies may face additional taxes or fines.