The Companies Act was created to make things easier for growing businesses. Over time, new laws were put in place that challenged the norms. With payroll software in India, you can alleviate some of the pressure of annual compliances. Pay attention to the new terms, and keep your company in the profitable zone.
What Is Mandatory Annual Compliance?
When a new company surfaces, there are a lot of things it needs to prioritize. Among these things is mandatory annual compliance. Losing sight of this compliance will cost your company a stacking amount of penalties. That is why all necessary compliances need to be filled annually. And since the law has minor and major changes each year, it is vital to keep your eye on things that affect your financial success.
Current businesses are already aware of the intricacies when dealing with the compliances. Their involvement has helped shape the law into its current fair state. Mandatory annual compliance was created thanks to the Companies Act, so follows similar rules.
It’s important to note that compliances are different between public and private companies. The size of the company will also play a role when enforcing any compliance. The list contains annual mandatory compliances for both public and private businesses.
General and Board Meetings
General and board meetings have to be held at the registered office of a business, or in the surrounding area of the business. At least four board meetings need to be held per year, but this requirement can change based on the size of the company. The resolution of the agendas brought forth during these meetings are filed with the Registrar.
Returns and Financial Statements
In the filing of the returns, important information about company hierarchy is released. This includes the positions of directors, shareholders and high-ranking members.
For the financial statements, the balance sheet is required. The statement of profit and loss account should also be included. The director report is necessary, but only for companies that fall within this specific guideline.
Income Tax and GST Returns
During the tax season a company will need to file a tax audit if it is above the limit of INR 1 Cr. A goods and services company is recognized under the GST ACT and is required to submit a GST based if the reach a specific milestone for annual turnover.
Once you arrange your accounts, an auditor will give an audit report based on the statements. Within this audit report will be important financial information about the company. This is the same information that gets passed to the Registrar of the jurisdiction.
Maintenance of Registers and Records
A company that falls under the limited type has to maintain its statutory registers and records. The location should always be at the company’s registered office, and the records need to be open for inspection.
If a company is registered under the Indian Companies Act, it is mandatory for an auditor to be appointed for the first Annual General Meeting. This is pending approval from the Board of Directors, and must be done in under a month’s time.
Stay away from the hefty fines associated with mandatory annual compliances. They are risky to the unprepared, and completely damaging to new businesses. The terms are clear, and it is up to your company to keep up with the changing laws.