Company Compliance

What Is Company Compliance?

Company Compliance refers to the legal and regulatory obligations that businesses must meet to ensure they operate in accordance with the laws and regulations of their respective jurisdictions. This includes a variety of filings, reporting, and governance requirements aimed at maintaining transparency, good corporate governance, and legal integrity. Ensuring company compliance helps avoid penalties, legal issues, and reputational damage.

Benefits of Company Compliance:

• Avoid Legal Penalties: Ensures that the company adheres to the applicable laws, avoiding fines, penalties, and potential legal issues.
• Promotes Corporate Governance: Helps ensure transparency, accountability, and ethical management practices within the company.
• Builds Trust: Regular compliance creates trust among shareholders, investors, and the public, enhancing the company’s reputation.
• Better Operational Efficiency: Regular audits and filings ensure that business operations are transparent and aligned with best practices.

Key Compliance Deadlines:

• Annual Compliance Filing:
  Companies must file annual returns and financial statements by the prescribed deadlines. These filings include Form AOC-4 (for financial statements) and Form MGT-7 (for annual return), which are typically due within 30 days from the Annual General Meeting (AGM).
• Statutory Audits:
  The company must undergo an annual audit of its financial records and file the auditor’s report along with the financial statements.
• GST Filings:
  Businesses involved in the supply of goods or services must file regular GST Returns (monthly, quarterly, or annually) depending on their turnover.

Process for Company Compliance:

1. Maintain Statutory Registers:
   Keep updated registers like Register of Directors, Register of Shareholders, and Register of Charges as mandated by law.
2. Filing Annual Returns & Financial Statements:
   File the Form AOC-4 and Form MGT-7 annually, updating the MCA with the company’s financial status and shareholder details.
3. Conduct Annual General Meetings (AGM):
   Hold an AGM every year to discuss important matters, including financial statements, board appointments, and other company-related decisions.
4. Statutory Audits:
   Ensure that the company undergoes a statutory audit conducted by a qualified auditor and submit the audit report to the MCA and shareholders.
5. Income Tax Filing:
   File the Income Tax Return (ITR) annually by the due date, ensuring the company meets its tax obligations.
6. Labor Law Compliance:
   Ensure compliance with labor laws like the Provident Fund (PF), Employee State Insurance (ESI), and other employee welfare acts.
7. Tax Compliance:
   Timely payment of taxes including GST, TDS, and corporate tax is required. Non-compliance can lead to penalties.

Documents Required for Company Compliance Services:

1. Financial Statements:
   • Balance Sheet, Profit & Loss Statement, Cash Flow Statement.
2. Audit Reports:
   • Auditor’s Report and Tax Audit Report (if applicable).
3. Tax Filings:
   • Income Tax Returns (ITR), GST Returns, and other applicable tax filings.
4. Company Statutory Forms:
   • Forms like Form MGT-7, Form AOC-4, Form DIR-12, Form INC-22, etc.
5. Labor and Employment Documents:
   • Documents related to ESI, PF, Gratuity, and other labor law compliances.

Penalties for Non-Compliance:

1. Fines and Late Fees:
   Failure to file annual returns, financial statements, or tax returns on time can result in fines, late fees, or other penalties.
2. Directors’ Disqualification:
   Directors may face disqualification or removal from their positions if the company fails to comply with statutory requirements.
3. Striking off Company Name:
   Failure to comply with filing requirements over an extended period can result in the company being struck off the register by the MCA.
4. Increased Scrutiny and Audits:
   Non-compliant companies may face increased scrutiny from tax authorities, regulatory bodies, and auditors.