Once a company is incorporated under the Companies Act,2013, the company must meet certain compliances as soon as it gets incorporated. Companies Act, 2013 lays down these compliances, and any failure in adhering to these rules could lead to heavy fines for company’ directors or members. Apart from basic compliances such as Applying for PAN, opening a bank account, etc., other substantial compliance are

1. First Auditor Appointment within 30 days

An auditor is a person who handles and maintains the financial records of a company. According to section 139, a company’s board of directors must appoint a statutory auditor within 30 days of its incorporation (except in the case of a Government company).

2.INC 20A – Commencement certificate

Under section 10 of the companies Act 2013, A company must obtain a commencement of business certificate by filing form INC 20-A within 180 days of its incorporation. The form includes a declaration by subscribers that they have paid their due capital on shares, and a bank statement must be attached as proof for the same. In case the company fails to do so, it will not be able to initiate any other filings with ROC.

3. FIRST BOARD MEETING

Post new company registration, the first board meeting shall be held within 30 days from the date of its incorporation.

Monthly compliances

After a company is incorporated, during its lifespan, it needs to comply with some rules and regulations related to taxation, TDS and Bookkeeping on a monthly basis.

1. GST Return filings

In India, a company registered under GST must file GST returns. It refers to filing all details of credit /debit related to goods and services. A company must file two monthly returns and one annual return if it has a turnover of 5 crore rupees. GSTR -1 has to be filed by the 11th of every month.

2. TDS filing

TDS is an abbreviation for Tax Deducted at the source. It is a method of collecting Tax when the transaction takes place, like salary or insurance payment. TDS is a way of reducing tax evasion in the system. TDS should be deposited to the IT department by the 7th of each month.

3.Book keeping

Book keeping refers to the recording of day to day financial transactions of the company, as various tax returns need to be filed monthly; Bookkeeping plays an essential role in these filings, Without accurate financial information, neither tax returns can be filed, nor business can function properly, which is why it is monthly compliance to keep your financials records updated. Every Private limited company has to compulsory maintain books of account as per law.

Annual Compliance

Rules which the company needs to comply with each year include –

1. ITR Filing

Income tax returns should be filed by the company annually. It includes the declaration of income/ expenditure and profit made in the financial year (a part of which needs to be paid as income tax). All companies must file an ITR, and failing to do so may lead to strict actions. The due date to file income tax for companies that require audits is 30th September of each year.

2. ROC/ Annual filings

It is mandatory for every company registered in India to file annual statements subsequent to holding an annual general meeting. An AGM is to be held only after the statutory audit is done by the appointed auditor of the company. Under ROC filings, Eforms that need to be filed include –

AOC – 4 – Audited financial statements of the company need to be filed using the AOC-4 form together with the directors’ report

Company needs to file this form within 30 days of conducting the AGM. In case a company makes any delay in filing of AOC -4, a penalty of 100 rupees per day would be imposed, and in the case of non-filing, the company may have to pay a fine of up to 10 lakh rupees.

MGT – 7/MGT-7A – Annual returns of the company need to be filed each year with the help of the MGT – 7(MGT-7A for Small Companies) form. The company needs to file it within 60 days of holding the AGM (Annual general meeting should be called before 30th September).

If a company fails to file MGT – 7/MGT-7A within 60 days of AGM, a fine of 100 rupees per day is levied on the company.

3. Company audit

It refers to the review of a company’s financial transactions and information. This audit is to be done by the auditor who was appointed by the company in AGM, and companies with turnover more than ten crores also need to file a tax audit report to the department by 30th September. Each year a company needs a statutory audit to be done by a registered auditor to maintain correctness in its books.

4. DIR KYC

DIN means Director Identification number; It is a unique number allotted to a director of a company by ministry. According to the latest rules, the director needs to file their KYC by using a web based facility for DIR-3 KYC on MCA 21 Portal annually before 30th September of every year. If the director fails to file their KYC either by using web based facility or Form DIR – 3KYC, his DIN will be deactivated, and late fee of 5000 rupees will be levied for late filing.