Given below are brief descriptions of certain compliances a newly incorporated private limited company needs to make within certain time frames:
Appointment of statutory auditor:
Within 1 month of the incorporation, a Board Meeting has to be convened to appoint the statutory auditor. Before making such appointment, the proposed auditor has to confirm that the appointment if made will be within the limits prescribed under Section 224B of the company Act. After appointment of the auditor, the auditor has to be informed. The auditor will have to file Form 23B within 30 days of receiving the intimation of appointment with the Registrar of Companies (ROC).
Allotment of shares:
The subscribers to the Memorandum of Association are the first shareholders of the company and they will have to be issued share certificates in the first board meeting. As the shares are allotted at the time of subscription to the MOA, Form 2 is not required to be filed with the ROC.
Depending on the nature of business of the company, there are certain other business registrations required in addition to the company incorporation:
- Applying for Permanent Account Number (PAN)
- Tax Account Number (TAN) for deducting and remitting the Tax deduction at source
- Service Tax Registration when the business involves provision of services – there is a basic exemption for small service providers where if the Annual Turnover from services is less than Rs.9 lakhs no registration is required.
- Value Added Tax (VAT) if the annual turnover is less than Rs. 7.5 lakhs (in the state of Andhra Pradesh), no registration is required and beyond that the company has to be registered under Turnover Tax or VAT depending on the turnovers.
- Central Sales Tax (CST) where inter state trading or imports and exports are made.
- Import Export Code is required if the company is engaged in importing / exporting.
- Trade License from the local authority
Click here to know more about various labor law compliances to be made.
On going Compliances for a company
Every company has to file certain forms with the Registrar of Companies for changes made or decisions of the board of directors. The following are the due dates for such forms:
Click here to know more about various compliances to be made under Companies Act.
Income Tax Act:
The income tax act makes responsible the payer of income of any person to deduct the prescribed percentage of income as Tax Deduction at Source and pay the balance amount to the recipient of such income. Thus, the tax is deducted at the source of income itself. The following are rates of TDS and the respective threshold limits for different types of payments to residents:
|Section||Nature of Payment||Threshold Limit (RS)||Tax (%)|
|194A||Other Interest for other entities||> 5,000||10|
|194C||Contracts to Transporter, who has provided a valid PAN for Individuals / HUF||1|
|194C||Contracts to Transporter, who has provided a valid PAN for others||2|
|194H||Commission or Brokerage||> 5,000||10|
|194I||Rent of Plant & Machinery||> 180,000||2|
|194I||Rent of Land, Building, Furniture, etc||> 180,000||10|
|194J||Professional or Technical Fess||> 30,000||10|
|194J(1) (ba)||Any remuneration or commission paid to director of the company||10|
Click here to know more about TDS Rates, due dates regarding TDS under Income Tax Act.
Service Tax Act:
“Service” means any activity carried out by a person for another for a consideration, and includes a declared service, but shall not include any activity that constitutes only a transfer in title of Goods or Immovable property by way of sale, gift or in any other manner and service provided by an employee to an employer in the course of the employment.
Service tax is payable @ 12% of the “gross amount” charged by the service provider for providing such taxable service including the Education Cess @3% of the service tax payable.
In case of Individuals or Proprietary Concerns and Partnership Firm, service tax is to be paid on quarterly basis. The due date for payment of service tax is the 5th of the month immediately following the respective quarter. In case of any other category of service provider than specified in above, service tax is to be paid on monthly basis, by the 5th of the following month. Payment for the month of March is required to be made by 31st of March itself.
Every assesse is required to submit a half yearly e – return in form S.T.3. The half yearly return is required to be filed by the 25th of the month following a particular half year.
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Dealers, having turnover above Rs. 7.50 lakhs and below Rs. 50 lakhs are required to register as a Turn over Tax (TOT) dealer and dealers having turnover of more than Rs. 50 lakhs are required to register as VAT dealers.
Every dealer shall submit every month a return so as to reach the assessing authority on or before the 20th of the following month for CST in Form CST VI and for VAT in VAT 200. He shall also be paid by 20th of the following month. The tax due for the month of March shall be paid on or before 7th April.
Every TOT Dealer shall submit a return within 30 days after the end of the calendar quarter in Form TOT 060B. The tax shall be paid within 30 days after the end of the calendar quarter.
Click here to know more about various compliances to be made under APVAT and CST.
Various compliances are to be made under different labor laws like Professional Tax, Provident Fund, Employee State Insurance etc., and click here to know more about compliances to be made under various labor laws.
RMC facilities businesses by undertaking areas of statutory compliances like filing of periodical returns with Income Tax, VAT, Service Tax and TDS etc. This gives the freedom to the promoters of the business in concentrating on the key areas of expertise of the management and helps the organizations follow various statutory provisions to avoid any non-compliance.