The Registrar of Companies for the registered Private Companies is vital. Besides of total turnover or the capital amount, the Company must comply with the requirements of the annual compliance.
All the Companies registered in India like LLP, Private Limited Company, Section 8 Company and LLP must maintain the annual compliance such as IT return and annual returns each year. Managing the business activities or operations everyday while complying with the difficult corporate laws can be a task for the entrepreneur.
In India, every company incorporated in India, including OPC, LLP, Private Limited and Section 8 Company must file annual returns with ROC every year. It requires conducting of an AGM and filing annual accounts with Registrar of Companies (ROC). Annual General Meeting must be held within 6 months from the end of the Financial Year (i.e., 30th September every year).
In case of new companies, 1st Annual General Meeting should be held within 18 months from the incorporation date or 9 months from the closure of Financial Year whichever is earlier. Companies Act, 2013 mandates that your F.Y. should start from 1st April and end on 31st Mar.
Annual Return includes information & necessary papers that comprise the Balance Sheet of the Company, P&L Account, Compliance Certificate, Register of Member, Registered Office Address & debentures details, Debt details & information regarding the Company Management.
The Annual Return would also disclose the shareholding structure of the Company, changers in Directorship & details of the transfers of securities.
Adherence to some rules & regulations is vital for successfully running a business in India. It establishes a standard for companies or businesses to live up to & provides a framework of dos and don’ts of an organisation or company and its employees.
To make sure that companies run responsibly, the Government has laid out a set of rules & regulations. This set of rules & regulations are called Compliances which companies should follow to run a company in India.
Compliances are established by keeping in mind the factors of economic, environmental & public interest. Every company or business must follow these rules to prevent consequences such as revocation or cancellation of License & hindered or slowed down business operations.
However, it can be so difficult for the business owners to remember every guidance & have knowledge of every regulation. Moreover, these regulations are ever-evolving and their importance is rising every day.
The primary purpose of Compliance Services is to aid companies or businesses remain up-to-date with Governmental & industry standards. It comprises services across various areas like accounting, risk management, registration and startup compliance. Following are the benefits of Compliance Services:
By engaging in operations that benefit society and the environment, a brand becomes more reputable in the eyes of the Government & customers alike. However, companies who follows these regulations get accredited which makes sanctioning loans & acquiring investors an easy process.
Compliance services help the companies in maintaining the safety & security by employing standards of employee welfare comprising rules for salary, safety, discrimination, etc. Working in a company that highlights the well-being of employees will make them feel safe & boost productivity.
Certain standards such as those of product quality & health guidelines in the food sector have been placed to make sure the safety of customers. Following these guidelines increases the reputation of the company and helps in accelerating growth.
Compliance Services provide legal assistance, which prevents the risk of lawsuits & penalties. Such events can be harmful to a business & hamper its operations and the reputation it has worked so hard to build. A compliance expert can prevent such happenings by keeping a business updated about standards in every field like advertising & manufacturing.
The financial department of a business must meet several standards in terms of taxes & accounting. Failure to meet such standards cannot only lead to losses but also legal issues.
For any business or company in India, Compliance of Law is the basic requirement. The filing date of Company’s annual return is simply shown on the MCA portal. This helps to increase the Company’s credibility and the regulatory in compliance of the return is a big criterion like loan approval, Government Tenders, etc.
To determine the creditworthiness of a Company or an organisation, potential investors are interested in looking at its financial status. Investors can get in touch with a business directly or follow the development of a standard filing. Due to this, investors choose to invest in a Company or a Business that follows a consistent tile schedule for Private Limited Company Annual Compliance.
By filing the annual return on time, the Private Limited Company can avoid heavy penalties & other legal problems. Whereas if the Company fails to do so, the Company status will change and charges for this failure will be huge penalties. With such penalties, the Company also be declared as inoperative/removed from the ROC. Such Company’s Directors are also disqualified from their further appointment.
There are so many different parts of a business that must be conducted in the right way, so there are various types of Compliance in Business. Let’s take a look at what they are & what they mean:
It refers to following the laws, rules & standards set by the Government to avoid any negative impact on the goodwill of the Organisation. The State in which the firm is build public relations & trust and bring transparency to its business. Complying with all the rules ensures any unnecessary duplication of efforts of resources. External Companies are further divided into two parts:
These are the rules and laws passed by the Central or State Government. Following is the list of Statutory Rules that a Company must adhere to:
These are the rules & laws passed by some regulatory bodies set up by the Central or State Government. Some of these are listed below:
Shops and Commercial Establishments Act (S&E)
1. Accounting & Payroll
The Employees Provident Funds and Miscellaneous Provision Act – 1952 (EPF)
The Employees State Insurance Corporation Act – 1948 (ESIC)
3. Direct Tax
The Professional Tax Act (PT) 1975
4. Indirect Tax
The Labour Welfare Fund Act (LWF) 1965
5. Secretarial Compliance:
In India, Businesses must comply with secretarial matters cited under the Indian Companies Act & report to the concerned Registrar of Companies.
The Contract Labour (Regulation & Abolition) Act – 1970 (CLRA)
6. Labour Laws:
An employer must consider the impact of the PF or Provident Fund, a government-regulated Pension Plan scheme.
The Child Labour (Prohibition & Regulation Act), 1986
7. Corporate Law
The Minimum Wages Act-1948
The Payment of Wages Act-1936
The Payment of Bonus Act 1965
The Maternity Benefit Act of 1961
The Payment of Gratuity Act 1972
The Equal Remuneration Act-1976
The Industrial Establishment (N&FH) ACT 1963
The Employment Exchange (Compulsory Notification of Vacancies) ACT-1959
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013
The Employees Compensation ACT-1923
The Industrial Employment (Standing Orders) ACT 1946
Model Standing Order Only The Industrial Disputes ACT of 1947
The Apprentice ACT, 1961
The Interstate Migrant Workmen (Regulation of Employment and Conditions of Services) ACT, 1979
The Factories ACT of 1948
The Trade Unions Act of 1926
It refers to an internally designed set of rules & regulations that the owners, traders, customers & employees follow to maintain the quality of services/products by the organisation. These are created & sanctioned by senior professionals & are followed by everyone in the company. Some Internal Compliances are setting up BoDs, conducting regular meetings & distributing stocks to shareholders.
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All individuals/corporate bodies(including foreign citizens/entities) indulging in business operations and generating income in India must have a PAN. PAN serves as the tax identity of your company. Furthermore, it is used by the income tax department to keep track of financial transactions.
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