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The Ministry of Corporate Affairs (MCA) governs all companies in India under the Companies Act 2013. All companies registered in India, such as private limited company, one-person company, limited company, and section 8 company, are required to submit annual MCA returns and income tax returns each year. All companies registered in India are required to comply with various regulations. Failure to comply may result in a penalty or disqualification of directors. Before filing an annual return, the company must hold an annual general meeting at the end of each financial year.
The Annual General Meeting will be held within 18 months from the date of incorporation or 9 months from the date of ending of the financial year for newly formed corporations, whichever is earlier.Initial Annual General Meeting are supposed to take place within six months from the close of the financial year. In India, the financial year generally begins on April 1, and ends on March 31.
In addition to an annual return from MCA, businesses do have to file income tax returns regardless of profits, revenue or loss. Consequently, even dead companies without sales are expected to file income tax returns every year. Private limited companies, small partnerships and one person business will be expected to file Form ITR -6.
Annual compliance provides a company with greater credibility for loan approval or some other related criteria.
Company annual compliance filings provide many businesses with information of their financial worth, which may contribute to new and interested investors
Companies are not declared as defunct with routine filings, and remain active. Annual compliance reports are also mandatory and may involve fines (additional fees) for the Company when reports are defaulted.
Regular annual compliance filings promote faster transfer to other forms of companies, as well as quicker settlements in the event of partnership breakup.
The below are the mandatory compliance with due dates which has to be followed by a company registered in India.
Companies registered in India are supposed to obtain a commencement of business certificate before beginning any company or exercising any borrowing capacity. The commencement of the business certificate shall be obtained within 180 days of the incorporation of the company. Failure to receive a business certificate would result in a fee of Rs.50,000 for the client and a liability of Rs.1000 for the client.
Any registered companies in India are expected to appoint a statutory auditor within 30 days of incorporation. Failure to designate an Auditor would result in a monthly fine of Rs.300 and the firm will not be permitted to start business
For every financial year, Any company incorporated in India is expected to file an Income Tax Return on or before 30 September 2020. Failure to file income tax may result in a fine of Rs.10,000.
Any companies incorporated in India must submit MCA Form AOC-4 on or before November 30th, 2020. Failure to submit AOC-4 may result in a penalty of Rs.200 each day of default or delay.
For every financial year, Any companies incorporated in India will be expected to file MCA Form MGT-7 on or before 31 December. Failure to submit AOC-4 may result in a penalty of Rs.200 each day of default or delay.
For all company directors DIN eKYC or DIR-3 eKYC form must be submitted. For DIR-3 eKYC filing, the directors mobile number and personal email address must be provided and verified. Failure to register DIN eKYC would incur a Rs.5000 penalty per DIN.
Company book of accounts includes vouchers, minutes, deeds, writings, documents, and registers pertaining to the transactions of the company.
Preparing general-purpose financial statements; includes the balance sheet, income statement, statement of Profit & Loss, and statement of cash flows.
Statutory audits performed by qualified auditors are conducted in order to report the state of a company's finances and accounts to the Indian government. .
Companies incorporated are required to E-File the audited financial statements & books of accounts with the Registrar of Companies (ROC).
All companies registered Under the Companies Act in India are required to file income tax returns each year on or before 30th September. .
Every company incorporated under the Companies Act, 2013 are required maintain certain records about the company in the form of statutory registers.