Listen जी, giving a birth to a baby is not enough. You also need to take due care of that baby. Similarly, forming a private limited company is not enough, you also need to make sure that the company is following all the compliance and should not get into any trouble for violation.
Moneyम्जी will tell you major compliance that you just cannot afford to avoid.
- Accounting: Not only does accounting help you in keeping things organized, helping you in effective decision making, but is also a mandatory compliance. Both Companies Act and Incoma Tax Act call for maintaining books of accounts. You need to record all your financial transactions, including income, expenditure, assets, liabilities, etc , including the documents supporting the same.
- Appointment of auditor: Auditor is a Chartered Accountant who audits or verifies that the accounts you have maintained are true and fair, and are compliant of all the laws. The first auditor of the company must be appointed within 30 days of the incorporation of the company, who will continue the office until the first Annual General Meeting of the company. Before the appointment, the auditor needs to give a written consent that he meets the requirements of the Companes Act and is not disqualified (read here to know about qualified and disqualified auditor).
- Board Meetings: Board meetings are held by directors of the company to discuss agendas and take important decisions. Minimum 4 board meetings must be held every year, and the time period between two board meetings should not be more than 120 days. 1/3rd or more number of total directors should attend the meeting, and minimum directors attending the meeting should be 2. A notice for board meeting should be sent at least 7 days before the board meeting to all the directors. “Just don’t forget to save minutes of the meetings”.
- Holding an Annual General Meeting: An annual General Meeting of the company is required to be held every year, where financial statements are approved, auditor is appointed, salary of directors is decided, dividend is declared and other plans of the company are discussed. The meeting must be held within 6 months of the end of the financial year, i.e, before September 30.
- Filing Annual Return and Financial Statements: Every private limited company is required to file its audited financial statement (within 30 days of Annual General Meeting) and annual return (within 60 days of Annual General Meeting), with the Registrar of Companies (ROC).
- Filing Income Tax Return: Filing and Income Tax Return is mandatory for a company. If you don’t have a revenue, it is even more beneficial to file a return. Why? Coz your losses can be carried forward till 8 years. Audited financials are necessary for filing an Income Tax Return. Last date for filing ITR for companies is September 30.
- Maintenance of registers: A company needs to maintain certain registers like register of charges, register of members, register of directors and key managerial personnels, register of debenture holders, minutes books, register of loans, register of investments, register of contracts in which directors are interested, etc.
Adhering to these few major compliances will keep your company stable and well compliant. Not only will you save hefty penalties, but can also walk with pride.
Any queries regarding this, just don’t hesitate to contact Moneyम्जी. Moneyम्जी is always at your sewa! Mail at firstname.lastname@example.org