what is Annual compliance for a company?
It may just be a dream to start a business of your own. Yet people who want to start a company often do not know the basic conditions or compliance that could result in hundreds or thousands of them spending on fines. In addition to fines, investigations and further audits may also be requested by the company and its officers.
Any annual compliance, including annual returns and income tax returns, must be maintained in all firms registered in India like a private limited corporation, a sole company, a limited company, and a Section 8 company. While the most common way to enter a market is to register a company, different compliances need to be followed until the enterprise is incorporated.
Compliances that are compulsory for a company
Annual General Meeting & Board Meetings
Private limited company shareholders must meet once each year within six months of the closing date of the financial year. The Annual General Meeting may be held at the registered office of the corporation or at a site in the city, town, or town where the company is registered.
The agenda for AGM will include topics such as financial statement acceptance, appointment or reappointment of auditors, dividend declaration, and appointment of directors and remuneration.
Furthermore, each organization is expected to have at least four board meetings each year and the distance between the two meetings should not be more than 120 days in compliance with the requirements of section 173 of the Act 2013, and important resolutions should be sent to the Registrar.
Annual Returns & Financial statements
The Annual Return and Financial Statements of the Private Limited Company shall be made by each incorporated company, irrespective of its revenue or activities, on a mandatory basis for each financial year. The tax return lists the facts about the owners, directors, members of the company, etc. of the company which must be submitted within 60 days of the annual general meeting.
The Financial Statements are various records related to the company's accounts, including the Balance Sheet, the Declaration of Benefit and Loss Account, and the Director's Report. The financial statements must be submitted within 30 days of the annual meeting of the General Meeting.
Income Tax & GST returns
Each financial year, a corporation shall file its income tax return along with other statutory requirements such as Advance Tax, Technical Tax, TDS, etc. Besides, if the annual revenue of a company reaches the cap of INR 1 Cr, the company must file its tax audit yearly. Besides, where a company is involved in the manufacture of goods or the provision of services recognized under the GST Act 2017 and exceeds the annual turnover limit of 40 lakhs, it must submit a monthly, quarterly, and annual GST return.
Audit Report
Each business arranges its accounts and requires a Chartered Accountant obligatory checking the equivalent at the end of the fiscal year. The auditor is duty-bound to submit an audit report on the reviewed financial accounts and consequently to the qualified registrar concerned.
Maintenance of Registers & Records
All statutory records and records in its registered office shall be maintained by a limited enterprise. Such papers shall be maintained at the registered office of the organization for review. The company's registers and papers include the Shares Log, the Shareholder Register and the Board of Directors List, the Board of Directors meeting resolutions, the Board Meeting Minutes, and the Annual General Meeting.
Auditor Appointment
All statutory records and records in its registered office shall be maintained by a limited enterprise. Such papers shall be maintained at the registered office of the organization for review. The company's registers and papers include the Shares Log, the Shareholder Register and the Board of Directors List, the Board of Directors meeting resolutions, the Board Meeting Minutes, and the Annual General Meeting.
