Compliances for Newly Incorporated Company

Compliances for Newly Incorporated Company

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 ADT-1 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.

Business Registrations:

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
  • Goods and 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.20 lakhs no registration is required.
  • 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

Companies Act:

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 (%)
194 Deemed Dividend 10
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 > 15,000 5
194I Rent of Plant & Machinery > 240,000 2
194I Rent of Land, Building, Furniture, etc > 240,000 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.

 

Goods and Services Tax (GST):

The Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. The GST is paid by consumers, but it is remitted to the government by the businesses selling the goods and services. Service Businesses whose turnover exceeds Rs. 20 lakhs is required to register as a normal taxable person.

Every statute requires the registered person to file the return in such format and within such time as may be prescribed in the specific statute.

GSTR-1 requires the taxpayer to furnish details of outward supplies or sales by 10th of the next following month.

GSTR-2 requires furnishing details of inward supplies or purchases by 11th of the next following month.

GSTR-3B requires furnishing monthly return by 20th of the next following month.

Payroll Compliances: 

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 Services

RMC facilities businesses by undertaking areas of statutory compliances like filing of periodical returns with Income Tax, Goods and Service Tax 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.