3 Jan 2020, 09:40 — 6 min read
Background: Once a private limited company is registered, it is imperative to fulfill the compliance requirements to guarantee smooth operations of the business. In their previous article, Vakilsearch shared how to apply for GST refund on GST portal. Here they explain what are the accounting and auditing guidelines that are mandatory for private limited companies as set by the Ministry of Corporate Affairs (MCA).
Despite the size or nature of the business, every private limited company must get its accounts audited by chartered accountants before the end of the financial year and this procedure of accomplishing the compliances likewise includes the selection of an auditor. The auditor will assess the records and produce audit report and audited fiscal reports which they will document with the registrar of companies.
We have explained beneath a portion of the regular compliances which a private limited company needs to compulsorily follow:
Also read: Mandatory compliances for a Private Limited Company in India
It is obligatory for private limited companies to file annual accounts and returns with details of the executives, shareholders and so on to the Registrar of Companies (ROC). Such compliances are necessary to be made once a year. As a part of the annual filing, the accompanying forms are to be documented alongside the ROC:
A Director’s Report is a financial document which needs to be filed before the financial year ends. All directors need to reveal details of their position as director in different organisations. And all other details must be submitted in hard copy in a precise director’s report.
Also read: Checklist of mandatory information to include in Director's Report
A private limited company needs to keep up different statutory registers and records as required by the company law, for example, register of shares, register of directors, register of members and so forth. Besides, merger documents of the company, resolutions of the meetings of the Board of Directors, minutes of the board meetings and annual general meeting, etc are also required to be preserved by the company.
Such records are to be kept at the registered office, and it will be open for scrutiny to its members during business hours. Additionally, the books of account of each organisation identifying with a time of at least eight fiscal years ought to be safeguarded and maintained in great control.
If a company does not adhere to the standards and guidelines of the Companies Act, at that point the company and each official who is in default will be culpable with a fine for the period for which default proceeds. In case there is a delay in any filing, penalties may be levied by the MCA.
Also read: 10 legal tips to safeguard your business interests this new year
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Posted byVakilsearch Staff
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