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Our team shall review and call you back in 3-4 hours.
Our team shall review and call you back in 3-4 hours.
An LLP is an excellent choice for small businesses or professions due to its minimal ROC compliance requirements. It is eligible for Startup India recognition and offers several advantages over a Private Limited Company, including fewer compliance obligations and no need for a statutory audit by a practicing chartered accountant until turnover exceeds Rs 40 lakhs or partners' capital contribution exceeds Rs 25 lakhs. For income tax purposes, LLPs are treated similarly to partnership firms, making them liable for income tax but exempting partners' shares from tax, and eliminating the need for dividend distribution tax. Additionally, provisions such as 'deemed dividend' under income tax law do not apply to LLPs. Section 40(b) allows deductions for interest to partners and any salary, bonus, commission, or remuneration paid. However, failure to file Form 8 or Form 11 for LLP annual filing incurs a penalty of Rs. 100 per day, per form, with no cap on the total penalty, potentially leading to significant costs if annual returns are not filed for several years.
In addition to fulfilling statutory obligations like GST and Income Tax, private limited companies are mandated to adhere to certain regulatory requirements outlined in the Companies Act. These obligations are crucial for maintaining transparency, accountability, and legal standing. Failure to comply with these obligations can lead to penalties and legal repercussions. Here are the key compliance requirements that a private limited company must address without delay:
Within 180 days of incorporation, it is imperative for a private limited company to file the Commencement of Business (COB) e-form INC 20A. This form signifies that the company has commenced its operations and is actively conducting business as per its memorandum and articles of association.
A practicing Chartered Accountant must be appointed as the Statutory Auditor to audit the company's books of accounts and issue audited Annual Financial Statements. This ensures that the financial records are accurate, reliable, and compliant with regulatory standards.
The company is required to file various annual forms with the Registrar of Companies (ROC) to report its financial performance, management structure, and other relevant information. These forms include the Annual Return, Financial Statements, and other documents as prescribed by the Companies Act.
Directors of the company are obligated to undergo electronic Know Your Customer (e-KYC) verification, which involves providing updated personal and professional information. This process helps in maintaining the authenticity and integrity of the directorship
For startup companies, it's essential to allocate additional funds, approximately Rs 40-50K annually, for audit expenses and ROC filings. This financial provision ensures that the company can fulfill its compliance obligations without financial strain. By diligently adhering to these compliance requirements, private limited companies can operate smoothly within the legal framework and uphold their reputation in the business ecosystem.
After Company incorporation, you will receive below documents
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